Recession predicted by Finder RBA Survey experts

Recession predicted by Finder RBA Survey experts
Recession predicted by Finder RBA Survey experts

Nearly 90 per cent of Finder.com.au's RBA Survey have predicted Australia will see a recession this year.

The 15 strong survey of experts and economists saw 13 say a recession was now likely. Back in December, around the same number of experts said there wouldn't be a recession.

Graham Cooke, insights manager at Finder.com.au, said fear of recession among the general public had been brewing for a while, although economists had until now, were more optimistic.

"We've seen fear of recession among the Australian public grow over recent months, while the vast majority of economists were saying it wouldn't happen. 

“COVID-19 pouncing unexpectedly on an already weakened Australian economy, has very much changed the game."

Two thirds of the experts surveyed however believe any recession would be over by the end of the year.

Over half of the survey (53%) predict an emergency rate cut this week, which would see rates drop to a historic low 0.25 per cent.

"Only a few days before the last RBA cut two weeks ago, 85% of economists said they did not expect a cut and only half thought the ASX 200 would drop by 10% in value", Cooke said.

“Within a week, we had a cut and a 20% drop. This signals the sheer severity and speed of the coronavirus impact."

Around half of the economists who responded to the last-minute survey (53%) expected the RBA to make an emergency cash rate cut this week.

Yesterday Westpac announced that they expect an interest rate cut and an announcement for quantitative easing to happen this week.

Most experts believe house prices will be negatively affected, with 20 per cent expecting a significant drop and 60 per cent expecting a slight drop.

Cooke said a downturn in the market could present a window for cashed-up Aussies ready to buy.

“If you’re one of the first-time buyers who missed out on the 2019 price dip, 2020 could provide a second bite at the apple. 

“Keep a close eye on your local market, but be careful – nobody knows what may be around the corner or how long this coronavirus dampening could really last,” Cooke said.

 

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

Tags: 
Rba Rate Decision Recession

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