Reserve Bank governor Michele Bullock predicts Australians will start spending moreStephen JohnsonThe NightlyFri, 10 October 2025 6:28AMCommentsComments
Reserve Bank governor Michele Bullock is predicting Australians will start spending more because rising house prices will make them feel wealthy.
“We are starting to see that consumption is starting to recover now and that reflects the growth in real incomes and it also reflects a wealth effect,” she told a Senate economics committee on Friday.
“So, as people are observing housing prices rise, perhaps they’re watching the equity market, and they’re feeling a little bit more wealthy. That also tends to result in people consuming a bit more.”
Ms Bullock said private sector spending was now going to hold up the economy instead of government spending with real incomes now rising, adjusted for inflation.
“A lot of strength was coming from government. What we’re starting to see now is a bit of a switch between the public and the private sector,” she said. “We’re expecting that to continue.”
She begun addressing the Senate committee on Friday morning without giving an opening statement.
Ms Bullock said unemployment, now at 4.2 per cent, was likely to edge up by the end of 2025.
“We think it’s possibly tight in some areas. We’re expecting the unemployment rate to drift a little higher during the year,” she said.
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