The Reserve Bank of Australia has opted for stability as it once again leaves the official cash rate on hold – interest rates have now remained at a record low of 2.50% for ten months.
In fact, it is likely that the current low rate will remain steady according to the RBA.
“A sustained increase in dwelling investment was in prospect, consumption had strengthened a little and business conditions were around average levels,” the minutes from last months Board meeting said. “Given this outlook for the economy and the significant degree of monetary stimulus already in place to support economic activity, the board considered that the current accommodative stance of policy was likely to be appropriate for some time yet.”
Steady as she goes for interest rates
The steady interest rate is beginning to have a positive impact on the economy. HSBC chief economist Paul Bloxham says, “the budget effect is most likely to wear off and the more powerful effect at work here is that interest rates remain low.”
“Low interest, we think, will see the housing market continue to pick up solidly and the retail environment also remains fairly well supported.”
Although the housing market has recently peaked, this is only due to the usual annual seasonal influences. Auction clearance rates are still healthy and annual growth rate remains strong, leading economists to assert that this correction is part of the natural cycle.
So, even though the temperature is dropping, mortgage owners can stay warm knowing with interest rates staying low their investment is safe. And with the end of the financial year approaching, it might be time to turn that investment property you’ve been thinking about into a reality. Please feel free to contact us at any time.