C&G Overview: The RBA July Announcement
The RBA has announced on Tuesday, July 1st, that it will again hold the national cash rate at a 2.5% low for the 11th consecutive month. Governor Glenn Stevens reiterated in his statement that financial markets are generally “very accommodative” and that the RBA consider “the most prudent course is likely to be a period of stable interest rates”. With consistency in mind, today C&G offer our analysis on what this means for Australia’s property investors.
Industry analysts, including Mortgage Choice spokesperson Jessica Darnbrough, suggest that this could be a trend for months to come, with others proposing that rates will not change until the end of the year. The reported national growth experienced in Australia, though remaining subdued, is being bolstered by the continued low cash rate. While the economy remains in good stead, the unchanged rate could help increase business growth, making our job market more generous. Unemployment is sitting steadily at 5.9% since April, according to the Bureau of Statistics. The banks’ statistics seem to agree with the general consensus too - analysis by Mozo finds that “the average Australian home loan rate has fallen by 0.32 percentage points”, showing that Australians are taking advantage of the ultra-low cash rates available.
Governor Stevens notes that the housing industry is set to continue to boom in high-demand areas (such as the bayside suburbs serviced by Chisholm & Gamon) with a slew of new apartments soon to hit urban areas across the country. Shane Garrett from the Housing Industry Association has suggested that lower cash rates will increase housing sector growth to the point where it could possibly eclipse the mining industry as the main leader of economic growth in Australia. For aspirant home owners, this may mean that your window of opportunity to invest at an affordable price is coming to a close. Let C&G help you make the most of the continued interest rate lows – take time to meet with us in-office, or pop by an open for inspection this weekend.