April 04, 2017
The Reserve Bank of Australia has once again decided to leave the cash rate on hold.
Today's decision marks the eighth consecutive month that the Board has left the cash rate untouched at 1.5%.
Mortgage Choice chief executive officer John Flavell said he wasn't surprised by the Board's decision.
“The economy continues to perform relatively well, giving the Reserve Bank of Australia no incentive to adjust the current monetary policy setting,” he said.
“Consumer sentiment is stable, business confidence is currently sitting above long-term averages, and property prices rose across the combined capital cities.”
According to the Westpac Melbourne Institute Index of Consumer Sentiment, confidence appears to be stabilising around the point where pessimists and optimists are around equal number.
In addition, the latest research from National Australia Bank found business confidence and conditions fell slightly throughout February, but remain above long-run averages.
Meanwhile, data from CoreLogic found property prices across the combined capital cities rose 1.4% throughout March.
Hobart and Darwin were the standout performers, with both cities enjoying a 3.1% surge in property values over the month.
Sydney also performed strongly, with the capital city recording a 1.4% jump in property values, taking the median dwelling price to $805,000.
“When you consider all of these factors, it is little wonder why the Reserve Bank of Australia choose to leave the official cash rate on hold once more,” Mr Flavell said.
“Moreover, over the past few weeks we have seen a number of lenders increase their fixed and variable rates. As such, the Reserve Bank probably saw no immediate reason to change their current stance on monetary policy.”
Looking ahead, Mr Flavell said future rates hikes were “more likely than not”.
“It really will be a case of ‘watch this space',” he said.
“Of course, regardless of what happens with rates in the short to medium term, it is important to remember that home loan interest rates are still low by historical standards. As such, whether you are looking to buy, upgrade, renovate or invest, now could be an ideal time to act.”