As the Federal Election draws near, the Reserve Bank has decided today to wait until next month to decide if it is necessary to implement the ninth reduction since 2011 and lower the official rate currently on hold at 2.5%. There have been concerns leading up to today’s decision with the downtrend of the AUD stalling as well as GDP growth forecast to grow only by 2.25% in 2013, down from expectations of 3.00% at the beginning of the year. Additionally with growing unemployment and slow wages growth there are several signs that another rate cut may be due in the near future.
While the RBA has deemed these conditions not dire enough to warrant a rate cut just yet, their current actions do not reflect a change in the long term outlook. The statement of the RBA released two weeks ago highlights their position that a further rate cut may not be far away – “with growth expected to remain below trend for longer and inflation to remain within the target even with the effects of a lower exchange rate, members concluded that a lower cash rate would better contribute to achieving sustainable growth in demand consistent with the inflation target.”
Earlier rate cuts have encouraged increased buyer confidence, translating to higher clearance rates and fewer days on market for vendors across the country. While a further rate cut might see another influx of buyers to the real estate market, keeping the rates on hold at this historic low is unlikely to deter buyers currently competing for property.
Because conditions are always unpredictable, it’s important that you stay on alert and visit us here to keep informed about all the upcoming rate decisions. In the meantime click here to see how your current rate stacks up against the competition.
We have access to a full range of mortgages and discounted interest rate offers starting from 4.79% p.a. 1 Year Fixed Rate (comparison rate 5.41% p.a.) and 4.74% Discounted Variable Rate (comparison rate 4.77% p.a.) – when most people are paying well above 5.00%.
Get ahead of the competition by staying in touch with your real estate market – join realestateview.com.au here, to set up your ViewAlerts for new properties (located on the right-hand side of our homepage).