Australia has been
cautioned by the OECD to keep further interest rate cuts in reserve and that
the country’s booming housing market could be at risk of a sharp correction.
The warning from the Organisation for Economic Cooperation and Development came
in its latest economic report on Australia.Australia’s benchmark interest rate
is at an historic low. In May, the Reserve Bank of Australia cut its key
interest rate by 25 basis points to an all time low of 2%. But cheap credit has
fuelled a housing bubble in some cities,A shortage of new houses, cheap credit
and generous tax breaks, together with money from overseas investors, have sent
the city’s housing prices sky high. Rising property prices in Australia’s
biggest city, Sydney, a strong currency and a drop in iron ore prices were
among the reasons for the cut.
Source: steel guru