Historically, Melbourne Cup Day has been remarkably popular for the RBA to move interest rates. However, this year things are slightly different. Rates remain unchanged at 2.5% and are expected to remain the same for some time to come.
Whilst economists still believe normalisation of rates is inevitable, they predict a hike will happen much later than originally anticipated, with any change most likely not taking place until the second or third quarter in 2015.
Slowing inflation keeps interest rates on hold
The headline inflation cash rate for 2014 eased from 3% p.a. in the second quarter to 2.3% p.a. in the third quarter, grounds for the RBA to keep interest rates as is for the November period.
The housing market continues to perform extremely well across Sydney, Melbourne and Brisbane. The spring season has brought with it an even higher number of listings than the same time last year, according to RP data analyst Tim Lawless.
Dr Andrew Wilson, senior economist at the Domain Group, agrees.
“It is an unprecedented listings boom”, he said, confirming that last month was the busiest listings period for October on record.
This comes as good news for buyers and sellers alike. Sellers are benefiting from an increased sales price thanks to the low interest rate allowing higher levels of borrowing. Meanwhile, Prospective buyers currently have a huge pool of properties to choose from.
Unlike the cup, there’s no need to gamble on the housing market – if you’re a mortgage holder you’re onto a winner.
If you’ve thought about downsizing, upsizing or investing, with interest rates continuing to remain low, perhaps now is the time to look at your options. As always, we’re here to share our expertise with you, so give us an obligation-free call.