Sydney property prices a social problem - Stevens
(12 June 2015 – Australia) Sydney’s property prices have caused concern for Reserve Bank of Australia (RBA) governor Glenn Stevens.
Stevens told a business lunch on 10 June that the central bank was still open to cutting rates further and took into account the property markets throughout the country when deciding on adjusting the cash rate.
"What is happening in housing in Sydney I find acutely concerning for a host of reasons, many of which are not to do with monetary policy," he told the Economic Society of Australia.
"I think it's a social problem.
"I think some of what's happening is crazy, but we have a national focus and so that just increases the complexity."
Stevens told the lunch the RBA was open to the possibility of further policy easing, “if that is, on balance, beneficial for sustainable growth."
"I think it's quite some time before we even think about interest rates going up."
He also warned that there were limits to the effectiveness of any future moves in the cash rate and renewed his calls for governments to start spending on major infrastructure projects to help the economy.
Stevens said the outlook for June quarter economic growth was likely to be worse than the RBA had predicted two years ago, pointing to weak business investment, and government investment falling eight per cent in the past year.
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