Hauser Hints at More Rate Hikes Amid Property Market Woes

RBA Deputy Governor Andrew Hauser revealed his thoughts on being grilled by Treasurer Jim Chalmers during an interview for the top job. Hauser, who spent decades at the Bank of England navigating economic meltdowns and crises, said he expected Chalmers to question what Australia could learn from someone coming out of a 'failed country' like the UK.

Hauser noted that Britain's economic turmoil stands in stark contrast to Australia's enviable standard of living. He recalled being struck by the average standard of living when he arrived in Australia, saying it hits you as soon as you get off the plane.

The RBA deputy governor also delivered a blunt reality check for Australia's supply-starved property market. Hauser pointed out that a 50% surge in house prices since Covid was directly caused by critical stock shortages and plummeting rental vacancy rates.

Hauser emphasized that Australia simply isn't building homes fast enough, warning that this puts pressure on housing stock, not just house prices but rents and rental availabilities as well. He shut down any idea that interest rate tweaks could solve the housing crisis on their own, saying 'the role of monetary policy in all of this is frankly limited.'

Hauser dropped a sobering warning for homeowners and property buyers struggling under mortgage stress, declaring that the RBA would not hesitate to hike interest rates again if inflation stays high. He stated that their message is simple: inflation is too high.