It would appear that the RBA don’t like change very much, at their meeting today, the Board decided to leave the cash rate unchanged, so it will continue to sit at its record low of 1.50% for another month (which we are not complaining about!).
In their official statement, the RBA stated “In Australia, the economy is continuing to grow at a moderate rate. The large decline in mining investment is being offset by growth in other areas, including residential construction, public demand and exports. Household consumption has been growing at a reasonable pace, but appears to have slowed a little recently. Measures of household and business sentiment remain above average.”
Labour market indicators have been a little more confusing. The rba noted that “The unemployment rate has fallen further, although there is considerable variation in employment growth across the country.” Part-time employment has been growing, while growth in full-time employment has been slowing. But the forward-looking indicators suggest continued expansion in employment in the near term, so graduates rest assured if you look hard enough, there will be jobs available.
The RBA also reported that “Inflation is still quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain for a while”, so basically just sit tight.
“Low interest rates have been stimulating domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.”
Cautionary measures have strengthened lending standards in the housing market. Many lenders are also taking a more cautious attitude to lending in certain segments. Growth in lending for housing has slowed over the past year and turnover in the housing market has declined. The rate of increase in housing prices is lower than it was a year ago, although some markets have strengthened recently. Considerable supply of apartments is scheduled to come in over the next couple of years, particularly in the eastern capital cities. Growth in rents is the slowest for some decades, but with the cash rate still at a record low there is no better time than right now to get your foot on the property ladder! But don’t worry our team can help you out with that.
If you already have a home loan, please remember that when rates are on the move, it’s always wise to revisit what your current rates are to ensure you’re still getting the best deal available for your needs. Here’s why. Whilst we don’t like to toot our own horn, we always go in hard on negotiating better than advertised interest rates. We also have some pretty good “street cred” with the banks/lenders which often afford us better discounts than the average broker or bank manager. Yep, as the saying goes, it can come down to who you know!
So, if you are looking to buy, refinance, fix your interest rate or invest in property, Loop in with our expert team and we’ll find the most competitive product for your needs. Get in touch with us now through one of the methods below: