Booming cities could have raised rates

If each Australian city and region could set its own interest rates, Hobart and Adelaide would have raised theirs in the past financial year.

The Reserve Bank has cut official interest rates three times since the May election, but a report from SGS Economics has found significant differences in how Australian cities and regions are performing.

SGS Economics' Terry Rawnsley says Melbourne, Hobart and Adelaide are booming while Sydney's growth has slowed, and regional areas are suffering due to the drought.

Under his hypothetical interest rates table, Adelaide and Tasmania would have lifted their interest rates 0.25 per cent in 2018/19 as investment boomed.

Mr Rawnsley predicts Sydney would have cut interest rates from 2.75 per cent to 2.25 per cent in response to slowing economic growth, while Melbourne would have remained unchanged at 2.5 per cent.