ANZ Research now expects the Reserve Bank of Australia to make no change to the official cash rate in 2018 and two hikes in 2019. This development is positive for the house-price forecast in 2018 but weighs on house price growth the following year.
"The good news is offset to an extent by the slightly lower-than-forecasted price growth in the first quarter.”
That said, the modelled house price expectations are largely unchanged from the model’s January outlook.
The shift in interest rate views for this year is offset to an extent by the slightly lower-than-forecasted price growth in the first quarter, which means that momentum will be less of a positive for the forecast than previously thought.