This chart shows the recovery of the Australian housing market.
It’s proof that the country’s monetary policy still works, one of the reasons that the Reserve Bank of Australia could start raising interest rates as soon as the fourth quarter this year, HSBC Australia and New Zealand chief economist Paul Bloxham told Business Insider this morning.
HSBC is waving the flag for rate hikes as it has “a more optimistic view on China,” Bloxham, a former RBA economist, said.
It’s also forecasting a rate increase because consumer sentiment and the housing market are improving, meaning Australian monetary policy has been working as intended, he said.
The RBA is holding its monthly interest rate meeting today, with most economists tipping the cash rate to stay on hold at 3%.