All of a sudden, bad news became good news for asset prices, as it ensured further central bank and government intervention to prop them up.As the images of unemployment lines weaving around the block reached our screens, measures of support were put together by the RBA and the Morrison government, which prevented the worst from happening to the property market.People outside a Centrelink office in Melbourne on April 20, 2020.
Although the conclusion of JobKeeper and the end of hundreds of billions in government stimulus is yet to be felt, the recovery in the official ABS figures has been impressive to say the least.Source:SuppliedIf unemployment were to continue to fall at the same rate as in the most recent ABS labour force report, by mid-year it would sit at just 5 per cent.
Late last year, Bank of Canada Governor Tiff Macklem stated that the BOC was planning on keeping interest rates at their current near-zero level until 2023. Words that may have little concrete meaning when tested by a set of circumstances that central banks like the BOC and the RBA were not expecting., the cash rate being cut by 1 per cent would result in a 30 per cent rise in real housing prices over a three-year period.
That bubble was meant to pop about 10 yrs ago. GFC and covid came around and still nothing
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