Prospective home buyers and existing mortgage holders breathed a collective sigh of relief today as the Reserve Bank of Australia left the official cash rate on hold for the ninth consecutive month.
A weaker than expected inflation result ultimately forced the Reserve Bank to leave the cash rate untouched at 2.5%.
According to data from the Australian Bureau of Statistics, the consumer price index rose 0.6% in the March quarter, for an annual rate of 2.9%.
Economists had expected a rise of 0.8% for the quarter and 3.2% for the year.
The lower than expected figures means inflation now sits comfortably within the RBA's target range of 2 to 3%, which will allow the Reserve Bank to keep the cash rate low.
But while weaker than expected inflation figures have encouraged the Reserve Bank to leave the cash rate on hold, all other economic indicators suggest the economy is going from strength to strength, meaning a rate hike could be just around the corner.
Data from the Australian Bureau of Statistics found the unemployment rate dropped 0.2% to 5.8% last month – highlighting the ongoing strength of the labour market.
Meanwhile, research from RP Data found property prices continue to climb, with capital city dwelling values rising 3.5% in the first quarter of 2014. Indeed competitiveness - particularly in the Sydney and Darwin property markets - is at an all time high, which is ultimately forcing property prices higher.
But while property prices do continue to climb, they are not surging at the same levels we saw last year, suggesting now could be a good time for potential buyers to get onto the property ladder.
Further, with rates sitting at historically low levels and the belief that this could change very soon, potential home buyers should be able to find a home loan product that is not only suited to their needs, but very sharply priced.