Australia Case Study

The figure obviously had not return to pre-crisis level. Moreover, recent commodity prices had fallen significantly which will affect Australia’s short and long term economy.

First of all, from 2008 to 2015, property prices of all capital cities in Australia have increased rapidly. People have had obsession with buying houses. At the same time,

The effect in the probability of an increase in the overnight cash rate will decrease in the aftermath of the Queensland floods. Because of the decrease in the probability of a .25% increase (decrease), it is likely the cash rate will not change in the month of January or on February 1st. This is in part because of the effects of the Queensland floods will have had on the national and local economy. Effects of the floods can also be observed in the form of low inflation and lack of economic growth, but these are considered to be “temporary adverse effects” so it is likely that rates will increase in the near future but not in this period (Jan-Feb 2011) of time.

First and foremost, it is important for the NSW government to recognize the region's unique position and start reacting according to its inhabitants' individualized needs. For ones, special attention should be paid to access issues for residents of RRR areas. Some of the reasonable solutions include maximizing workforce participation, service re-engineering, and environmental enablers (Roufeil & Battye, 2008). This way the rough environments of NSW would become more accessible for people and the access to required services would be less challenging.

This increase was largely due to the expansionary fiscal policies that many countries adopted in response to the Global Financial Crisis.” According to estimates, Australia is supposed to minimize debt that is slowly growing by 2018. Australia’s income is slower than what others expected and there has been an increase in unemployment (Carmignani

The trend in unemployment within the Australian economy has swayed significantly in the past 30 years. As of current, the national unemployment rate has been established at 5.8%, after an unexpected downturn from 6% in February of 2016 (“Australia Unemployment Rate | 1978-2016"). Over the past 30 years, the trend of national unemployment has been a downward drop, steadily moving from an approximate 8.2% in 1976 to

The line is vertical because once the Fed sets the money supply, it remains constant until the Fed changes it”(Hall and Lieberman). This is exactly what the Fed conducted for this month. The interest rate can only be changed by the Fed changing the money supply in the money market. The Fed has to watch how much they increase interest rates, “The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal”(FOMC, June 14, 2017). The job of the Fed is to influence the interest rate but there is a dilemma concerning how much the Fed can actually raise it. The growth of the economy has been slow, along with low inflation just below 2% the FOMC released, with two of their main goals for the year being “maximum employment and price stability” being a 2% inflation rate(FOMC, June 14, 2017).

Recently, The Australian housing market has been growing rapidly which reflects the housing affordability crisis as the housing price rises much quickly than household incomes. There are two key observations of current Australian housing market from Yates, firstly today’s housing affordability problem is mainly a structural problem and intensified by cyclical pressures. It began 40 years ago when inflation switched focus on housing, besides, there are more renters than purchasers under today’s housing stress situation, and the housing

The Australian dream of home ownership is under threat, and currently, the nation is facing a serious long-term structural problem in relation to the availability of affordable housing within the country. Figures from the Australian Bureau of Statistics revealed that since 1982, citizens aged between 25 and 34, who are able to afford their own property have fallen from 56% in 1982 to 34% in 2011, a 30 year low. If this figure is not damning enough, an Australian Bureau of Statistics Survey of Income and Housing revealed that between 1982 and 2011, the percentage of home buyers that spent more than 30% of their gross income on housing costs, increased from 10% to 21%. This figure in itself demonstrates the problem of rising house prices within the nation, especially when income is not growing at the same pace.

Home ownership has long been considered the epitome of success within Australian culture. A 2008 literature review highlighted almost 70% of the Australian population fall into two distinct categories on home ownership: outright ownership and mortgage repayments, (University of Western Sydney Urban Research Centre, 2008, p. 4). Outright home ownership comprises approximately 34% of the Australian population in the first category. Approximately 35% of the Australian population are currently repaying loans after obtaining a mortgage from an approved financial institution. Renting comprises approximately 29% of the current Australian population, (University of Western Sydney Urban Research Centre, 2008, p. 4).

In the past quarter the unemployment rate in South Australia has remained steady at 5.6% (Australian Bureau of Statistics, 2009) but this figure is volatile and may increase next month. The youth unemployment rate, however, in South Australia remains at 21.9% with the Western and Northern suburbs having significantly higher

It is basically dependent on where you live in NT since local markets offers locally grown product as an option to the supermarket. In northern territory, cost of basic lunch menu including drink is Au$18.The cost of combo meal in fast food restaurants is AU$11.Basic 1 litre of whole fat milk cost is AU$1.28.the cost of rice (1kg) is 4.10 Australian dollars. The cost fruits like apple, banana, and oranges of 1kg are ranges from 4.40 Australian dollars to 3.03australian dollars. The cost vegetables like tomato, potato and onion of 1kg are ranges from 3.05 Australian dollars to3.50 Australian dollars. The cost of basic monthly utilities (electricity, heating, water,) is 275.65 Australian dollars for 85square meter apartment per person. Moreover, the phone tariff for 1 minute prepaid card is AU$1.19.The average cost of internet (8mbps) is au$53.In northern territory, the cost of microwave 800/900 watt (Bosch, Panasonic,LG,) is AU$223.The cost fuel per litre is AU$1.37. In addition to that, the cost of monthly ticket for public transport AU$69.the tariff of taxi for 1 km is 2 Australian dollars.

The Real GDP % forecast for Australia is currently 2.8% and expected to decrease by 0.3%. The unemployment rate is predicted to remain at 5.9%, in line with market expectations (The Australian, 2017). The consumer prices in Australia increased inflation to 2.1% in 2017, with the market expected to rise a further 2.2%, making it the highest inflation rate since 2014 (Trading Economics, 2017). The current Government Bond 10Year Yield is 2.58%, indicating a consistent and stable economic growth (Trading Economics, 2017). It is important to note the increase in strength for the interest rates of USD and EUR against the AUD. (Economist, 2017). The RBA is unlikely to raise interest prices due to debt re-payment increase, which would has a negative economic effect due to the unbalanced supply and demand ratio within the market (The Economist, 2017). In correspondence with future political uncertainty, speculation is created over AUD depreciating against the USD within the next year from 0.77 to 0.66 and against EUR from 0.71 to 0.69 (Australian Dollar Forecast, 2017).

Interest rates are a tool that central banks use to implement monetary policy. They represent the percentage rate at which interest is paid by a borrower for the privilege of using money that has been lent to them and the interest can be paid at various time intervals. Higher interest rates will have an impact upon inflation and employment and could lead to a reduction in consumer spending and investment. The Bank of England meets every month to set the UK bank rate. There are nine members of the Committee and they are appraised of all the latest data on the economy and business conditions. Their task is to keep inflation below 2% but above 1% in the following 2 years.

An economic outlook from the Organisation for Economic Cooperation and Development (OECD) in June 2016 described the Australian housing market as “The unwinding of housing market tensions to date may presage dramatic and destabilis-ing developments, rather than herald a soft landing” (OECD 2016, ). This report rais-es the debate of ‘Australian housing bubble’ again to the hottest topic since 2014 when the International Monetary Fund (IMF) reported Australia as having the third highest house price-to-income ratio in the world (ABC 2014). However, the debate commenced even earlier back in 2001 after Howard first introduced the First Home Owners Grant in 2000 (KEEN 2016). Starting from then the housing price went up from a steady increase to boost in the following one and half decades.