Many of Australia’s baby boomer generation were untouched by spiralling interest rates and the real pressure was on younger generations, according to the Real Estate Institute of Queensland.

REIQ chief executive Antonia Mercorella cited this week’s report from PEXA which showed that a quarter of the $240 billion in home sales in 2021-22 in the eastern states were done without a mortgage.

“With about a quarter of residential sales in eastern states being cash sales, we’re heading towards similar number in the US where one in three mortgages are settled with cash,” she said.

“These cash property sales were made in typical retiree suburbs and suggest there are many boomers who are not only unaffected by sharply rising interest rates, their savings are actually benefitting from them.

“On the other hand, the data demonstrates that the blunt instrument of interest rates is impacting younger Australians the greatest.

“The Federal and State governments now need to engage in the heavy lifting to assist the RBA with inflation control, otherwise we may see a generation locked out of home ownership permanently.”

The PEXA data was not all that different from the accepted view that about a third of households had a mortgage while another third rented and the remaining third owned the property outright.

Meanwhile, the Commonwealth Bank’s Gareth Aird has pushed out the date by which he believed interest rates would be cut from the fourth quarter this year to the first quarter in 2024.

“The Australian economy contracted on a per capita basis in the first quarter and we expected a per capita recession to be confirmed in the second quarter national accounts,” Aird said.

“A recession now looks a distinct possibility in the second half of 2023 and we put the chance at 50 per cent.”

Morgans Stockbroking economist Michael Knox said the only thing saving Australia from recession and “a very bad experience” was the prices being received for our exports like coal, iron ore and agricultural commodities.

Knox, who maintains the Reserve Bank will hike its cash rate in July and August, said a Labor government had never achieved a position where Australia’s cash rate ended a tightening cycle when interest rates increase, below that of the US Federal Reserve.

Coalition Governments had achieved it twice, but there had only been four tightening cycles since 1990.

“The record shows that it is possible to be below the Fed but it has not yet been achieved by Labor so this will be a great challenge,” he said.

Knox said exports were Australia’s saviour.

“The only way to sustain an economy like this from going into recession is if you are receiving really good prices for what you are selling to other countries,” Knox said.

“Fortunately, Australia is really lucky to be in that situation.

“They (export prices) have been the highest ever achieved,” he said.

“In the previous cycle which peaked only a few months ago Australian export prices were around eight times the level that were at the end of last century and seventy per cent higher than they were in the previous mining boom. They have declined but they are still 40 per cent higher than they were in the previous resources boom.”