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Today in property: it's the economy, stupid; banks asked to cut rates; cost of living dropping

After all that, the status quo remains intact. Yesterday's decision by the Reserve Bank to keep official interest rates on hold has left many economists with eggy faces (pardon the pun Scott) and the cohort of futures traders who bet on a cut with empty pockets.

As Michael Roddan put it in today's The Australian, it's the economy, stupid. In forecasting a pick-up in wages growth and noting a strong labour market and rising export prices, the RBA simply couldn't see a case for a cut.

RB governor Philip Low has lowered the growth forecast from 3 to 2.75 per cent. He performed a wee flip on previous statements to say that unemployment would need to fall before a cut would be considered. The Herald's Ross Gittins reckons Low is also being careful not to reignite the housing boom in Sydney and Melbourne, "which has left too many people with far too much debt."

The ABC put it this way: the RBA has kept its powder dry, but unemployment will light the fuse. Like Gittins, it also talks today about Australia's ridiculously high debt-to-income ratio, which is yet to start shifting downwards.

So, where's the relief likely to spring from? If the RBA gets its way, the banks should start playing more of a role; Low cited the lowering cost of bank funding as a sign that lenders should start passing those savings on to customers.

Treasurer Josh Frydenberg took time out to talk up the resilience of Australia's economy yesterday, predicting a boost in household consumption bought on by impending tax cuts. The retail sector will be crossing its collective figures that JoFry is right, after sales volumes fell 0.1 per cent over the March quarter.

It's a good time to be a consumer, however; the ABS released figures yesterday showing the cost of big-ticket household expenditure items is actually coming down.

On the resi property front, SQM Research property sales listings data showed an unseasonal drop in Sydney and Melbourne in April - partly due to the fact Easter and Anzac Day lined up this year, reducing the number of weekends of trading.

Construction industry employment also fell in April, at its fastest rate in six years, according to the HIA's Performance of Construction Index. HIA economist Tom Devitt warned that home building remains in a delicate position.

...and after many months of speculation, the worst has been confirmed for Purplebricks. It is quitting Australia less than three years after it entered, after reporting an $18 million loss for the six months to October.

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