The Reserve Bank of Australia (RBA) records shows that the economy in Australia is slowing down. Though the RBA is satisfied with its monetary reduction it has, however, affected the renters. The figures show that the total credit provided to the private sector was gone up to 0.4 per cent in April being the very low growth since the year 2002. In the beginning of this year, the credit level raised up to 14.1 per cent.

The above statistics shows that the economy is slowing down due to which the cost of living has increased levying more tax on consumer borrowing. Adding to this is the rise in oil prices and food goods that have placed a burden on the consumers and their budgets - putting them to stringent financial constraints. The decline in loans for property investment and the housing shortage has carried to the renters. Loans for investors to buy residential properties grew by 0.5 per cent in April, bringing annual growth down to 9.5 per cent, the slowest annual growth in 16 years.

While this is so, there are no symptoms of recovery of the housing market and the investors are avoiding the housing market. The increase in population has also been the reason for increase in rents and this needs more houses to be built and approved. However, the borrowers feel it is better. The restraint in the growth has made the RBA to further increase the rate of interest, the evidence of which shows that the efforts to restrict the inflation is effective. The RBA has raised interest rates four times since August to bring the inflation under control, presently at 4.2 per cent. The Central Bank is however maintaining its interest rate and says that it would be steady till the end of this year.

The RBA has to consider that the increase in interest rate though it tries to control the inflation it will only further burden the people. Already due to the raise in interest rates there is a great decline in house buyers, rise in prices of house and mortgage recession. The economy in Australia is slowing down mainly because of these reasons. Moreover, the cost of living has also increased a lot compared to what it was before which is another issue for the decline of buyers and investors in the property market.

Therefore the slow economy in Australia can be made good by the interference of the Government and the RBA. The investors have increased due to the high interest rate and the property market has gone down. The interest rates have rose up to 7.25 per cent which is the highest ever in the recent years. This has to be curtailed and the rates of the household should come down thus reducing the cost of living, which in turn will increase the buyers in the property market. If this is done then automatically the level of economy will gradually head to a better position.