The race that stops the nation also coincides with the meeting that pauses the economists. At 2:30, all eyes were on the RBA meeting and, in a photo finish, the decision has been to leave interest rates on hold at the record low of 2.0%.
Although the recent regulatory changes have seen the Big Four increase their rates, the market hasn’t ground to a halt.
If we take a step back and look at housing prices since 2008 (the start of the global financial crisis), the fact remains that prices in the majority of Australian cities have risen steadily – and they don’t look set to drop.
Step back even further and you realise that, no matter what the ‘buzz’ in the market is, house prices will continue to grow. Alan Oster, chief economist for the NAB Group, notes that the overall national figures obscured some of the more positive individual performances across individual state markets.
And while the NAB has lowered its expectation for national house price growth from 3% to 2.3%, that’s still on the rise. He says “… the state of the housing market at present is slowing a little bit but it would need to because you’ve had very strong growth recently.”
Interest rates may rise
He also reminds us that”…when interest rates start to rise… you need to remember that’s at least 12 months out so…and then I think they’re going to increase relatively moderately.”
So in short, the news is good for both sellers and buyers. A slow down in prices means that people who are looking to buy can breathe a sigh of relief knowing they are more likely to get onto the property market (or move up the ladder), while owners looking to sell will realise a profit.
So whether your horse wins today or not, with interest rates staying low there’s still something to smile about. If you need any help or advice please don’t hesitate to contact your mortgage broker.