News
Wealth Pi Fortnightly Economic Snapshot
Interest Rates
The Reserve Bank of Australia (RBA) cut the official cash rate to 4.10% in February 2025, and market expectations suggest a 12% probability of a further 0.25% rate cut at the upcoming April meeting, reflecting ongoing speculation about monetary policy adjustments amid economic conditions.
RBA
The Reserve Bank of Australia (RBA) has lowered the cash rate to 4.10%, recognizing progress in disinflation while remaining cautious about the economic outlook. Inflation has moderated faster than expected, with underlying inflation at 3.2% in 2024 and projected to fall within the 2–3% target range in early 2025. Economic growth is expected to pick up gradually, supported by rising household consumption and public demand, while global trade uncertainties and financial conditions remain restrictive. The RBA acknowledges risks on both sides and aims to balance inflation control with economic stability.
Australian Markets
Dwelling approvals in Australia rose by 6.3% in January 2025 to 16,579, driven by a 12.7% increase in private sector apartments and a 1.1% rise in house approvals, with the total residential building value reaching a record high of $9.04 billion, while non-residential building approvals declined by 20.7%, according to the ABS.
Global Markets
US:
In US, President Donald Trump’s newly imposed 25% tariffs on Canada and Mexico, along with a 10% tariff on China, are expected to drive up U.S. home construction costs by increasing prices on key building materials like lumber and drywall, leading to higher home prices, smaller homes, and fewer major renovations, while retaliatory measures from Canada and Mexico and stock market declines raise concerns about a broader trade war, despite Trump’s push for increased domestic logging to offset foreign material reliance.
UK:
UK rental inflation has slowed to its lowest level in 3.5 years at 3%, down from 7.4% a year ago, as rental supply increases by 11% and demand falls 17%, though competition remains high with 12 renters per home; affordability constraints, policy changes, and lower migration are limiting further rent rises, with growth expected at 3-4% in 2025, particularly in more affordable areas outside major cities.
Property
Five years after the COVID-19 pandemic began, Australia’s housing market has experienced a 38.4% increase in national home values, driven by record-low interest rates, fiscal stimulus, and shifting migration patterns, followed by a sharp 7.5% decline as rates rose, and a second surge of 14.5% from early 2023 despite affordability challenges, with recent trends showing stabilization amid cautious economic conditions.
Disclaimer
Information contained herein has been prepared by Wealth Pi Fund Pty Ltd for the purpose of information only. It does not constitute an offer for sale, or solicitation for the purchase, of securities, units or other investments. It is intended as a general guide only. This information does not constitute personal advice and has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information. You need to consider the Information Memorandum (IM) for a product, which are only available for eligible investors, before making a decision whether to acquire or hold interests. All views expressed in this document are those of Wealth Pi Fund and should not be construed as an offer or recommendation at any time. Wealth Pi Fund recommends investors seek professional advice before making any investment. Past performance of any product described on this site is not a reliable indication of future performance. Wealth Pi Fund has taken care to ensure all content within this document is accurate, however Wealth Pi Fund (or any other company or associated entity) does not make any representation or warranty that such information is accurate or complete, nor do they accept any liability for harm, loss, costs, or damage arising from the use or reliance on the information. Any investor must satisfy itself by its own investigation and by undertaking all necessary searches and enquiries as to the accuracy and comprehensiveness of all information contained within this document or otherwise made available to it by any one of the entities.
