Dr. Emmett Brown: You’ve got to come back with me!
Marty McFly: Where?
Dr. Emmett Brown: Back to the future!


The Reserve Bank of Australia met today and for them it really was a case of back to the future! The week before last we were sure the RBA were thinking all was good to ride out another month, with no big issues on the horizon.  Then a serious case of “HELLO, McFLY” happened this past week:

  • The UK voted to leave the EU in the ‘Brexit’,
  • The AU voted that everyone and no one should be Prime Minster in the federal election,
  • Ratings Agencies came out warning Australia that our prized Tripe A rating isn’t rock solid or guaranteed, and,
  • A number of changes have come in with the rollover of the new year via the federal budget.

The central bank last moved on rates back in May 2016, with a 0.25% cut which was well received by both existing home owners and property investors, as well as those looking to get into the market for the first time.  There is still expectation that the rate could be cut again in the coming months, but despite all of the uncertainty the RBA were able to hold firm this month.  The cash rate will remain at 1.75%.

In their statement, the RBA stated “overall growth is continuing, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend”, and went on to acknowledge that “Dwelling prices have risen again in many parts of the country over recent months”.  Overall the outlook was being alert but not alarmed.

“Indications are that the effects of supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments”.  The RBA also noted that a “considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities”.

We do expect further moves from the RBA and banks on interest rates in the coming months.  So if you haven’t already, get in touch with us to check out your unique situation and current interest rates.  There are a lot of great deals out there.

Of course we have seen all of this before, and that’s why this situation is a back to the future moment.  We’ve seen the Grexit threat, Julia Gillard’s minority government and changes and threats to our ratings and federal budget before.   Despite all the doom and gloom from the various news cycles, our economy and more importantly our property market has powered on.  Both are expected to do so going forward, although at not quite at the speeds previously seen.  In fact in some quarters, there is a belief that both the Brexit and the change to our Triple A rating might even be a good thing for our economy and property markets.  The thought is a loss of the Triple A rating would put downward pressure on the Australian Dollar, lowering it, and therefore encouraging external investment from overseas.  It will hurt us on our next Bali holiday, but might be a good thing if you are currently investing in NSW and QLD.

But you never know in this great game, and in the words of Marty McFly, believe me, it makes total sense.  Keep in touch via Social Media and this blog for the latest information and updates.

If you already have a home loan, please remember that when rates are on the move, it’s wise to revisit what your current rates are to ensure you’re still getting the best deal available for your needs.  Book a session or get in touch.

If you are looking to refinance, fix your interest rate or invest, Loop in with us and we’ll find the most competitive product for your needs.  Get in touch with us now through one of the methods below:

Book a 1 on 1 Session with us to review your situation
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