The economist’s predictions were split – and now we know. It seems as though May is the month for rate cuts, as one year ago was the last time we saw a movement in interest rates. Then it was cut to a record low 2.00% – today, Reserve Bank of Australia has applied a further cut to the official cash rate of 0.25%. It now stands at an historical low of 1.75%pa.
While we await tonight’s budget, everyone can rest easy knowing the news is good for mortgage holders, investors or those seeking a new home.
If you’re looking to sell, you’ll be pleased to know that Australia’s house prices have moved up in the three months to the end of April with national growth of 2.4%. This is across the board including capital cities and regional areas.
If you’re looking to invest, the federal government’s pledge to go ‘hands-off’ on negative gearing will give you a welcomed sign of relief.
Low Interest Rates are a great time to buy
And if you’re looking to buy, the continuation of low interest rates combined with a plethora of keen sellers, even in the winter months, means that your options are growing.
The recent update of NABs authoritative business survey showed a very solid improvement in both business conditions and business confidence. Their chief economist Alan Oster says, “The latest Survey provides strong evidence that the Australian business environment has not only weathered global uncertainties, but appears to have strengthened. There are also signs that the non-mining recovery is becoming a little more broad-based.”
Add to that news of a drop in the unemployment rate in April and a buoyant Australian manufacturing sector and we can all reap the benefits of a buoyant economy.
Of course, tonight’s 2016 Budget will also bring some interesting titbits to ponder. If you have any questions about your situation or how these low interest rates affect you, please don’t hesitate to contact your mortgage broker at any time.