The Reserve Bank of Australia has left the official cash rate on hold at 1.5% for the third consecutive month.
The decision failed to shock any industry pundits, with recent economic data proving the domestic market has been tracking along nicely of late.
Over the last few weeks, inflation surged higher, consumer and business sentiment remained robust, and property prices headed even further north.
According to the ABS, consumer prices in Australia rose 0.7% over the September quarter – exceeding economist expectations of a 0.5% lift. Over the course of the year, inflation rose 1.3% - ahead of the predicted 1.1%.
Meanwhile, business sentiment also improved, with Roy Morgan research showing confidence rose 5.8% to 114.9 in September.
According to the survey, 41.3% of businesses expect their business to be better off financially this time next year.
Australian households were also optimistic about their financial situations. The Westpac-Melbourne Institute Consumer Sentiment Index for Australia rose 1.1% in October, higher than the 0.3% rise recorded in the previous month.
In addition, low interest rates have continued to keep the heat in the housing market with price growth more stable now than in previous years.
According to CoreLogic RP Data, dwelling values rose 0.5% across the five capital cities in October – spelling good news for both sellers and buyers.
With all of this in mind, it is little wonder why the RBA decided to keep the official cash rate on hold.
If you are a mortgagor, now is a good time to take advantage of the low interest rate environment by making extra repayments on your home loan. You will be saving on interest and building a buffer to minimise the impact of future rate rises.
If you're yet to jump onto the property ladder, speak to a mortgage broker today to find out how much you can borrow.