Treasurer Jim Chalmers will name the next governor of the Reserve Bank of Australia in July.
Dr Chalmers said he planned to make the announcement about the future leader, with Philip Lowe’s term ending in September.
“This is a big job, it’s a big call, we’ve worked through it in a methodical way,” Dr Chalmers told ABC radio on Thursday.
He would not confirm whether Dr Lowe would be reappointed, and said the future governor needed to be “well placed” to implement recommendations from a review into the central bank to take it into the future.
“It’s a key institution that obviously makes decisions which matter a great deal to the living standards of the Australian people,” he said.
“That’s why we don’t take decisions like this lightly.”
In April, Dr Lowe said he was prepared to stay on at the RBA if asked, and oversee the wide-ranging overhaul prompted by the review.
Dr Lowe has presided over 12 official interest rate rises in the past 13 months, which have added more than $11000 to monthly repayments for a typical typical $500,000, 25-year home loan.
The official cash rate has risen from record pandemic-era lows before the first rise in this cycle, in May 2022, to 4.16 per cent. Some major banks predict they will hit 4.6 per cent in coming months, implying two more mortgage bill increases in July and August.
Also on Wednesday, property company Domain released data suggesting house prices in Sydney, Adelaide and Perth would break records by the end of the next financial year.
After leading the 2022 downturn brought on by the Reserve Bank’s aggressive interest rate hiking cycle, Sydney is poised to stage the strongest rebound of the capital cities.
House prices are forecast to grow by 6-9 per cent in the harbour city. If that growth eventuates in an already rebounding market, it will reverse the 9.6 per cent peak-to-trough fall in Sydney house prices.
Adelaide dodged a downturn last year and could end up avoiding a serious downswing. Forecasts have house prices lifting by two to five per cent over the next 12 months.
Perth house prices are also anticipated to reach record highs by the end of the 2023/24 financial year if Domain’s predicted 1-3 per cent growth comes to fruition.
Unit and house price growth is expected across the combined capitals and a more modest lift in the regions over the 12 months.
Domain chief of research and economics Nicola Powell said population pressures were butting up against abnormally low levels of new listings to drive prices up.
Temporary and permanent migration has lifted exponentially since Australia reopened its borders in late 2021.
“Of course, unlike natural population growth, those arriving from overseas aren’t already housed,” Dr Powell said.
She said nearly 130,000 extra dwellings would be needed in the next financial year to house the new arrivals.
Sluggish home building will also keep supply constrained and likely keep pressure on home prices.
“While prices are expected to rise, affordability will contain the pace of growth, as the likes of rapidly rising interest rates and ongoing mortgage serviceability challenges continue to play out in a complex and dynamic market,” Dr Powell said.
While higher interest rates and serviceability buffers will likely keep a lid on the amount buyers can lend, the report suggests lower borrowing capacity could also divert demand to more affordable areas.
There are also about 880,000 households tipped to roll off their low fixed-rate mortgages to higher variable loans throughout the next financial year, which could trigger forced selling.
Similarly, the expected rise in unemployment from higher interest rates and slower growth could prompt an increase in mortgage arrears and distressed sales.
-with AAP
