The RBA Board, refreshed after the holiday break, has chosen a gentle approach to welcoming in the new year by keeping interest rates on hold at a record low of 2%.
Most economists believe that rates will remain unchanged for the foreseeable future, which means that many who put buying or selling low on their priority list in December and January may start to now stir.
Lower dollar supports lower interest rates
While the lower Australian dollar isn’t necessary good for those who travel overseas, it’s been a welcomed boost for exports. This, in turn, has led to economic improvements, including the unemployment rate hitting a two-year low.
Klaus Baader, chief Asia-Pacific economist at Societe Generale SA in Hong Kong, states that “in many ways Australia has proven to be unbelievably lucky once again.”
The Australian dollar was high when the country needed to import and the drop “… helps to contain production costs and it’s contributed to making Australia very competitive even at lower prices.”
This is also predicted to help the Australian economy expand 2.6 per cent this year, the fastest pace among 11 developed economies after Sweden.
From a property perspective, continued low interest rates foreshadows that 2016 will be less of a rollercoaster ride, allowing more time for careful planning. If this is your year to buy, sell or invest, remember your mortgage broker is there to help with any questions.