The Reserve Bank of Australia (RBA) has met today to decide its September monetary policy decision in what is governor Glen Stevens’ last rate day. Following the decision to cut interest rates to a record low-level of 1.5% in August, members have decided to now keep rates on hold, continuing the spate of good news for mortgage holders and investors alike.
This came as no surprise, with none of the 25 economists polled by Bloomberg expecting a rate cut, supporting the RBA’s belief that the most recent interest rate cut hasn’t had time to fully work through the system yet.
Meanwhile, Australia’s housing market has shown no sign of slowing down, pushed along by record low interest rates and a lower number of listing. Cities such as Brisbane, Canberra and Adelaide saw their clearance rates rise to above average levels. Sydney was again the stand out with its fourth straight weekend of auction clearance rates above 80 per cent last weekend, and is now enjoying its best run of auction results since July last year.
Market booming on low Interest Rates
Domain senior economist Andrew Wilson said the market had “irresistible momentum”.
“You have to start coming up with a new word for boom,” he said, “These clearance rates will work through to higher prices.
“But the really noticeable thing was the regional cities. Brisbane saw a clearance rate of 54 per cent when it is usually travelling in the 40s, Canberra hit 82 per cent and Adelaide 74 per cent.
“The lower interests rates are really flowing through, money is cheap and there is a consistent level of demand.”
This combination of cheap money and a hike in demand for housing is good news for mortgage holders and investors alike, and is expected to continue throughout the busy Spring period.
If you are thinking of buying or selling, you will no doubt be enjoying interest rates at an all-time low. You can also rest assured that your biggest asset – your home – is still a safe and solid investment.
If you are considering any changes in the future, now is a great time to find out your options – as always, we are here to help you any way we can.