December 03, 2013
It seems the Reserve Bank's rate-cutting cycle has officially come to an end, with the Reserve Bank opting to leave the official cash rate on hold for the fourth consecutive month.
At its Board meeting earlier today, the Reserve Bank of Australia erred on the side of caution and left the cash rate on hold at 2.5% after new data found consumer confidence is on the up.
Mortgage Choice spokesperson Jessica Darnbrough said the renewed surge in consumer sentiment was buoyed by the strength of the Australian economy
“The latest Westpac Melbourne Institute Index of Consumer Sentiment increased by 1.9% in November. According to the Index, this result can be attributed to a number of things including a stable unemployment rate and sound house price growth,” she said.
“Research by RP Data shows house prices rose by 1.9% over the September quarter. This subtle growth in dwelling values is encouraging consumers to be more optimistic about the state of the economy.
Ms Darnbrough said the positive results recorded by the Westpac Melbourne Institute Index of Consumer Sentiment aligned nicely with Mortgage Choice's recent consumer sentiment survey, which also found the majority of Australians are now confident about the state of the economy.
“More than 55% of Australians believe the economy will remain strong throughout 2014. This is no doubt a result of the recent spate of positive economic data.
“The unemployment rate is sitting at just 5.7%, the Consumer Price Index continues to outperform expectations and the total value of dwelling finance commitments jumped 5.3% in September.”
“With all of this positive data spilling out of the Australian economy, it was largely unsurprising to see the Reserve Bank leave the cash rate untouched this month.”
Ms Darnbrough said the Reserve Bank's decision to leave the cash rate untouched means interest rates continue to hover around record lows. As such, now may be a good time to consider jumping onto the property ladder.
“If you are considering purchasing a home in the near future, now may be a good time to capitalise on the current state of the market – before the Reserve Bank lifts rates and property prices climb to new highs,” she said.
“Alternatively, if you already have a property, now could be a good time to review your current home loan and check to make sure you are still in the right product for your needs.”
For further information or to arrange an interview, please contact:
Mortgage Choice Corporate Affairs
(02) 8907 0502 / 0448 240 047
(02) 9818 9334 / 0434 975 868
About the survey
Market research company Nine Rewards was commissioned by Mortgage Choice to conduct the 2013 Consumer Sentiment Survey. The survey was completed by 1,015 Australians in late November 2013. Note, the figures have been rounded to the nearest whole percentage point.
This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the information, consider its appropriateness to your circumstances.