Australia Central Bank chief and representative, Philip Lowe, is confident in that the country’s economy will remain afloat despite the current property climate in the nation. Lowe is positive that even with the fall of house prices and consumer spending, the country’s recession-free streak for 27 years will remain intact.
Following Lowe’s statement, he has also advised banks to be laxer when it comes to supplying credit, states Reuters.
While the country is currently experiencing a downturn in terms of collapsing housing prices and impacted consumer spending, Bloomberg reports that the Reserve Bank of Australia is optimistic that employment growth will surge in the near future.
According to Bloomberg, this possible boost in employment can help counteract the falling property prices in the nation. In time, employed people might be qualified and eager to get their own homes, particularly with the low prices on the market today.
State of the Nation
The current state of the country has greatly slowed down in the past year. However, the job market is reportedly going strong according to Reuters. Of these, there is only about 5 per cent unemployment rate.
With the demand for houses falling in the past number of years, there has also been a decline in borrowing home loans. Taking in mind the state of the economy, banks and other lending companies are being urged to take risks. Otherwise, the fate of the economy could suffer.
To urge more people to borrow lines of credit, credit conditions should be re-evaluated.