December 01, 2020
The Reserve Bank of Australia (RBA) has today made the decision to maintain the cash rate target at 0.10% at its December monetary policy meeting.
Speaking about the decision, Susan Mitchell CEO of Mortgage Choice said, “Given the RBA’s decision to lower the cash rate target and deliver a package of measures at its November meeting, it isn’t surprising that the Board has decided to hold the cash rate at its last meeting of 2020.”
“The low cost of borrowing and significant Government stimulus continues to support the nation’s housing market activity. The latest CoreLogic Hedonic Home Value Index revealed that national dwelling values rose 0.8% during November. Growth was recorded in every capital city and is expected to continue into 2021.”
“There is a lot of urgency among buyers in the market right now, particularly in the nation’s capital cities. This is being reflected in the number of applications flowing through our national broker network, with home loan applications lodged growing 24.72% compared to November last year.”
“In the meantime, the record low interest rate environment and other monetary and fiscal initiatives continues to improve consumer sentiment. The Westpac-Melbourne Institute Index of Consumer Sentiment revealed that consumer sentiment lifted by 2.5% in November, despite the many challenges weighing on the nation’s economic recovery.
“While the next change to the cash rate is likely to be an increase, this is not expected to occur until further progress is made towards full employment and inflation is within the RBA’s target band of 2-3%, and this is likely to be a few years away. The latest data from the Australian Bureau of Statistics Labour Force survey revealed the unemployment rate rose to 7.0% in October.
“The latest decision from the RBA means Australians can continue to take advantage of historically low home loan interest rates well into the New Year. If you haven’t had your mortgage reviewed this year, you should consider making an appointment with your local Mortgage Choice broker to see how you might be able to save and set new goals in 2021.
“If you’re a first time buyer or a prospective investor hoping to get your foot on the property ladder in 2021, now is a great time to talk to your broker about how you can put your best foot forward. Stock levels are low at the moment, making competition between buyers extremely fierce, and your broker can help you get home loan pre-approval sorted so you’re ready to make an offer when you find the right property for your needs,” concluded Ms Mitchell.
