RBA Says Stronger Population Gain May Have Pervasive Effects

Australia’s faster-than-expected population growth could have “unanticipated or more pervasive effects” on the economy, a senior Reserve Bank official said, a day after policymakers unexpectedly raised interest rates.

“Higher population growth increases demand for housing. Initially we expect this adjustment to come through higher rents and higher average household size,” Marion Kohler, head of economic analysis at the RBA, said in a speech in Perth Wednesday. “In the longer run, there is also a boost to dwelling investment.”