RBA: Renters Unlikely to See Benefits from Interest Rate Cuts
RBA Governor Michele Bullock emphasized that a low inflation rate would be particularly beneficial to renters.
Interest rate cuts may not provide immediate relief to low-income renters, as highlighted in a parliamentary committee meeting.
Michele Bullock, Governor of the Reserve Bank of Australia (RBA), pointed out that lower-income renters were heavily impacted during recent interest rate increases, facing significant rent hikes and inflation.
However, she noted that a decrease in interest rates may not directly benefit them. Bullock highlighted the potential benefits as inflation gradually declines.
She added, “As the housing market continues to face supply and demand challenges, there is progress in rents decreasing, which is positive for affected individuals.”
Bullock’s comments followed the RBA’s decision to reduce the interest rate from 4.35 to 4.10 percent in February 2025, marking the first reduction in four years.
While the government remains hopeful that inflation has peaked, some economists express caution about the economic outlook.
Bullock also observed an increase in average household size recently, noting adjustments being made due to the high costs of rentals.
Discussing further rate cuts during the inquiry, Bullock stated that there were varying opinions on the RBA’s interest rate adjustments.
She emphasized the central bank’s cautious approach amidst declining inflation trends, pointing out the decision not to lower rates in December 2024 despite a drop in the annual inflation rate.
Australia’s Reserve Bank Governor Michele Bullock at a media conference in Sydney, Australia, on Feb. 18, 2025. David Gray/AFP via Getty Images
Bullock highlighted the potential for further rate reductions if sustained inflation progress is observed.
She urged patience among the public as the RBA carefully monitored the situation and emphasized the importance of data-driven decision-making.
“While interest rates may impact mortgage holders, inflation affects everyone, especially those with lower incomes and greater vulnerability,” she said.
