The Reserve Bank of Australia has cut interest rates for the second time in a year in bid to head off a strengthening Australian dollar and protect the economy against falling mining investment.
Prices for iron ore, Australia’s number one export, have halved in recent months.
Interest rates are now at a new all-time low of 2%.
Analysts warned past housebuilding booms were likely to be repeated, and flagged the Sydney property market in particular as close to overheating.
Government revenues in resource-rich Australia are particularly hard-hit by falls in commodity prices.
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