AU RBA Bulletin

Housing investors differ from owner-occupiers in both their incentives and behaviour. Their housing purchase decisions are primarily driven by expected financial or capital returns rather than finding a place of residence, and tax incentives such as deductibility of interest expenses further shape their behaviour. Unlike in many countries, households in Australia comprise a significant share of the investor base in the residential property market; this is one factor contributing to Australia’s relatively high level of household debt. ...

Having access to efficient, competitive and safe ways to send and receive money across borders is crucial for economic activity, trade and financial inclusion. Yet, globally, the user experience for cross-border payment services often falls well short of that for domestic payments. Cross-border payments are more complex than domestic payments because they involve the transfer of money between two or more jurisdictions, often with different currencies, operating hours, payment system structures and legal frameworks. Improving the user ...

In July 2025, the RBA convened its 33rd annual Small Business Finance Advisory Panel to discuss issues relating to the provision of finance and the broader economic environment for small businesses. The Panel provides valuable insights on conditions faced by small and medium enterprises (SMEs) and complements information drawn from the RBA’s liaison program, economic indicators, business surveys and data from financial institutions. Understanding developments in economic and financial conditions for small businesses is important ...

Productivity growth is the key driver of rising living standards over time. Looking through recent volatility, productivity growth has been slow over recent years – focusing on the entire economy, it was broadly unchanged over the five years to June 2024 (Graph 1). Even if we remove industries like health care where measuring productivity can be quite hard, growth has been slower than previous decades. One potential explanation that has been put forward for the slow productivity growth over recent years is the entry of younger, less ...

The unemployment rate plays an important role in Australian monetary policy, as it is relevant for both sides of the RBA’s dual mandate. It is a key metric in our assessment of full employment, and forecasts for the unemployment rate are an important input into the inflation forecasts. That said, the unemployment rate is only one of many indicators that the RBA monitors when evaluating labour market conditions. In practice, our view of the labour market is formed by considering a number of other indicators (Ballantyne, Sharma and ...

Cash plays an important role in the community as a means of payment, store of value and a backup to electronic payment methods. Because of this, the RBA places a high priority on Australians continuing to have reasonable access to cash services. Since 2017, the closure of bank branches and bank-owned ATMs has led to increased distances to access cash services provided by banks, particularly in regional and remote areas. However, despite the significant reduction in bank-owned cash access points since 2017, the distance that most ...

Interest rates and rents often move together. Some have argued that this positive relationship is evidence that higher interest rates have been a key driver of increases in rents over the past few years, due to leveraged housing investors passing through increases in their interest costs to their tenants. This article uses anonymised tax return data covering 2006/07–2018/19 to estimate the direct pass-through of interest cost changes to housing investors’ rental income. It finds small pass-through on average, even when interest rates ...

The output gap – the difference between actual output and potential output – is an important consideration for monetary policy as it is a measure of the extent of spare capacity in the economy. This article explains how RBA staff form an assessment of potential output and the output gap. We draw on a range of model-based estimates, capacity utilisation indicators and activity measures. Model-based estimates give a quantitative assessment of the level of spare capacity in the economy, but there is considerable uncertainty modelling ...