Two choices. One welcome decision.

August 15, 2013
NSW Admin

Richmond Mortgage Choice broker – Andrew Heath, looks at the impact of the latest rate cut.

In the lead up to this month’s Reserve Bank of Australia (RBA) Board meeting, I believe the RBA had just two choices - keep rates on hold at 2.75% or cut them further.  

The uncertainty of the current economic environment meant a rate hike was never an option. However if you consider the current signs of improvement in the economy, the possibility of keeping rates on hold was entirely feasible.  

As a guide, capital city house prices have risen by 3.5% in the last couple of months – that’s good news for Richmond mortgage holders, who are likely to see property values climb. Housing finance commitments have also improved, meaning more Australians are taking out a home loan, and finally, consumer confidence has remained steady. 

Downside risks

It’s all good news so far. But I think the key aspect for anyone with a mortgage in Richmond, is that despite encouraging signs in the property market, the Reserve Bank hasn’t seen sufficient growth in consumer confidence to rest on its laurels.  

This was a key factor behind the decision to cut rates in August. It’s an attempt to further stimulate the economy, and several factors other than consumer confidence would have been taken into consideration by the RBA in making the call to cut rates.  

One such factor is shaky business confidence. Here in Richmond conditions remain buoyant but the Reserve Bank is concerned that nationally the mining boom is reaching a peak, and this brings concerns that unemployment may rise especially in mining related sectors. 

A clear message to home owners, buyers and investors

As a Mortgage Choice broker in Richmond, I believe the latest cut to the cash rate sends a clear message to homebuyers and investors. While business confidence, unemployment concerns and even political uncertainties continue to simmer, the bottom of the current property market cycle appears to be behind us. This provides a rare opportunity.  

Richmond home buyers and sellers have a chance to capitalise on historically low interest rates. Quite simply, now is a great time for clued-in and prepared Richmond buyers to consider entering the property market and get in ahead of rising property prices.  

I’d also urge Richmond sellers to take heed of the cash rate cut, and spruce-up your property now in the lead up to the peak spring selling season. It could shape up to be one of the best we’ve seen for some time.  

The good news for Richmond mortgage holders is that low interest rates offer plenty of opportunities to pay off your home loan sooner and get started on your next financial goal.

Don’t miss these opportunities. Discover how you can make the most of the rare combination of low rates coupled with a rising property market. I welcome your call on 4578 9904 or 0411 550600 - 7 days a week or drop into Shop 1/37 Lennox St. Or feel free to email me at

Posted in: Interest rates

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