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C&G’s Guide to the October RBA Announcement
On Tuesday afternoon, the Reserve Bank of Australia announced that the all-time-low national cash rate of 1.5% would remain in place for yet another month. In today’s blog, C&G provide an overview of the board’s decision, and discuss implications for the local and wider property markets.
The official national cash rate has remained on hold at 1.5% since August 2016, and the Reserve Bank of Australia intends to continue this stasis with their latest announcement. With conditions in the global economy improving and the Australian economy expanding by 0.8% in the June quarter, our national financial position is predicted to continue improving in the coming months, bolstered by a sizable prospective investment in infrastructure. Wage growth has remained low and is expected to remain so for some time yet: this factor - coupled with substantial household debt - is constraining growth in household spending. Improvements across the labor market may support gradual wage growth in the future as the economy strengthens further.
Looking to the real estate market, conditions continue to vary around the country, further supporting the Board’s decision to hold rates steady. In capital cities where prices have been rising over the past year, conditions are beginning to ease. This has taken pressure off the RBA to impose a rate hike to slow buyer demand. APRA’s supervisory measures have further assisted in curbing investor demand, and with many apartment developments sure to settle in the coming years this demand will be more than met.
Overall, October’s national cash rate announcement is designed to further support the gradual strengthening of the economy and slowly stabilizing property market. For those considering a property sale or purchase, conditions remain accommodative of both vendor and buyer – your strategy will be most effective when tailored to your personal circumstances. Chisholm & Gamon welcome you to our multiple Bayside offices to discuss your property strategy and how to make the market work for you.