Data released on Tuesday showed that Sydney’s median house price surged to a record in May after jumping 3.5 per cent in just one month – the largest increase across all capitals, as fierce demand outpaced supply, particularly for blue chip properties.
Melbourne and Brisbane gained 2.2 per cent, Adelaide and Canberra were up by 2.1 per cent and Hobart by 2.7 per cent.
Across the combined capitals, house prices rose by 2.6 per cent while the regions climbed by a lower 1.9 per cent during the month.
Jobless rate falling faster than expected
The Reserve Bank upgraded its assessment of the labour market, noting that the jobless rate is falling “faster than expected” and is expected to drop to around 5 per cent by the end of the year. In April the jobless rate fell to 5.5 per cent.
The bank also noted increased reports of labour shortages in the economy.
The RBA maintained its dovish guidance that conditions for an interest rate hike were unlikely to be met “until 2024 at the earliest”, despite market conjecture that the central bank could adopt a more optimistic tone in its post-meeting communications.
The RBA said the conditions necessary for a rate hike were a rate of inflation “sustainably within the 2 to 3 per cent target range”, and a labour market that was “tight enough to generate wages growth that is materially higher than it is currently”.
The RBA has previously said the unemployment rate would need to fall below 4.5 per cent for wages growth to increase materially, while underlying inflation grew by a paltry 1.1 per cent in the year to March.