Cash Rate Remains on Hold at 1.5%, Following Glenn Stevens’ Final Board Meeting

The Reserve Bank of Australia has announced that the cash rate will remain on hold for another month at 1.5%. In today’s blog, C&G discuss what this means for the property market, and the potential for cash rate movement in the future.

Consistent with general expectation among experts, the Reserve Bank of Australia has held the cash rate at the all-time low of 1.5%. Governor Glenn Stevens marked his final board meeting with the news of the rate hold, which is said to be at the hands of the strong property markets, particularly in Melbourne and Sydney. The value of home loans has been steadily increasing as the cash rate has fallen, despite lenders taking a more cautionary approach to finance in certain segments of the economy. In addition, auction clearance rates have returned to their highest in over a year.

While a further rate cut has been the topic of speculation among economists and real estate experts, we likely won’t see this come to fruition until at least November. By this point, the quarter three inflation data will be available. If inflation fails to budge and the Australian dollar remains strong, we could be looking at a further rate cut as we move towards the popular summer property season.

Governor Glenn Stevens steps down from the board as of next month, leaving behind him a legacy of 18 rate cuts, 750 basis points in easing and perhaps most notably, zero recessions. All eyes will be on his successor, Dr Philip Lowe, as we move towards the end of the year and into Australia’s busiest time for property market activity.

If you’re struggling to decipher the ups and downs of the cash rate and what this means for your real estate strategy – be it buying or selling – speak to one of our Chisholm and Gamon team in our offices across the Bayside region.