Industry reaction to Michele Bullock being named the new Reserve Bank of Australia (RBA) governor has come thick and fast, with some real estate experts saying outgoing governor Philip Lowe had been unfairly criticised.
First National Real Estate Chief Executive Officer Ray Ellis said Dr Lowe had been hard done by.
“The appointment of the new governor is part of the ongoing process where every seven years there is a new governor of the RBA,” he said.
“This is against the backdrop where the departing governor has been unfairly criticised for doing what is essentially his job, which is to steer and protect the Australian economy.
“His candour should be appreciated and is perhaps a lesson for many other leaders in our country.”
Dr Lowe will step down as the RBA boss on September 17 and from September 18 Ms Bullock will become the central bank’s first female leader.
She will serve a seven-year term.
“I am deeply honoured to have been appointed to this important position,” Ms Bullock said.
“It is a challenging time to be coming into this role, but I will be supported by a strong executive team and boards.
“I am committed to ensuring that the Reserve Bank delivers on its policy and operational objectives for the benefit of the Australian people.”
Ms Bullock’s appointment comes after a turbulent time in the role for Dr Lowe, who came under fire after famously saying interest rates would not rise until 2024, only to then lift them 12 times since May 2022.
In a statement Dr Lowe said he wished Ms Bullock “all the best”.
“‘The treasurer has made a first-rate appointment. I congratulate Michele on being appointed governor,” he said.
“The Reserve Bank is in very good hands as it deals with the current inflation challenge and implementing the recommendations of the Review of the RBA.”
Mr Ellis said mortgage holders had remained resilient during the interest rate rising cycle and sought to protect their homes.
“What we have found out throughout Australia, particularly post-Covid times, is that the Australian mortgage holders, which is 40 percent of the population, have great resilience in protecting their greatest asset, which is their family home or their investment,” he said.
“And if it’s their family home, it’s just like the Australian movie, The Castle, they’ll do anything to protect it.
“So during Covid times when we couldn’t spend a lot of money or we couldn’t get out of our houses, the vast majority of mortgage holders got ahead in their payments.
“There was no reduction in people not paying their rent. They were protecting their castle.”
Mr Ellis said the recent rate hiking cycle had been a shock after 11 years with no interest rate rises but mortgage holders remained resolute.
“It’s made people adjust, particularly with other cost of living pressures, but the protection of their castle and the buying of their castle and the buying of their dreams of making money in investment, which is predominantly property, has not subsided.
“All that has subsided is confidence in the general economy, which is outside our domain.”
Mr Ellis said low stock levels had helped keep the property market strong and we didn’t face challenging times but uncertain times.
“All we’re looking for from our state political leaders in our industry, and our national leaders is, some clarity around legislation, market conditions and the economic environment,” he said.
“In the general populace, mortgage rate rises have subdued demand, they have not stopped demand.”
The Agency Chief Executive Officer Matt Lahood said the change in RBA governor likely reflected the community’s attitude.
“Whether Philip Lowe has done a great job or not, I think the sentiment of the country is that it’s probably time for a change,” he said.
Mr Lahood also suggested an alternative lever the Federal Government could pull, other than interest rates, to help bring down inflation faster.
“Can they look at effectively using the GST, instead of just interest rates, as a means to reduce inflation,” he said.
“If that goes up two or three per cent, everyone is paying for it, not just the mortgage holders.”
Mr Lahood suggested raising the GST temporarily until inflation fell and noted doing so would not impact ‘essentials’ such as fruit, vegetables and meat, but goods and services.
“If the cost of goods and services go up, people will stop spending,” he said.
“Everyone would also share the load.”
The decision on the new RBA governor comes after earlier announcements that the board would soon meet eight times per year instead of 11 and a press conference will be held after each interest rates decision to explain the rationale to homeowners.