At today’s Board meeting, the Reserve Bank of Australia has decided to leave the official cash rate on hold for the sixth consecutive month.
With consumer sentiment and business confidence both receiving a boost in recent weeks, following the Government spill and subsequent appointment of a new Prime Minister, Mortgage Choice Franchisee Des Nation said there was no need for the Reserve Bank to change the current monetary policy setting.
“According to the latest data from the Westpac Institute of Consumer Sentiment, confidence climbed 4.2% over the month of October,” he said.
“This bounce in confidence helped to almost completely offset the loss we saw during the previous month.
“Further, data from National Australia Bank shows there was a partial recovery in business confidence, with financial market volatility and emerging market concerns moderating from the heights of the previous month.
“Both of these factors combined gave the Reserve Bank no real push to cut the cash rate. Moreover, given that most of the major lenders have moved out of cycle with the Reserve Bank in recent weeks, we have seen property demand start to wane ever so slightly.”
Recent research conducted by Core Logic found the hottest housing markets in the nation – Sydney and Melbourne – have continued to see an easing in the rate of capital growth.
Over the month of October, dwelling values climbed by just 0.3% and 0.6% in Sydney and Melbourne respectively. Meanwhile, the combined capital cities recorded dwelling value growth of just 0.3% - which is significantly lower than previous months.
“The Reserve Bank would be pleased to see that confidence is improving and the property market is cooling without the Board having to interfere with the monetary policy setting,” Mr Nation said.
“Of course, just because the Reserve Bank has chosen not to cut the cash rate at today’s Board meeting, doesn’t mean to say we have seen the last of the rate cuts altogether. What happens both locally and abroad over the next few months will determine the future actions of the Reserve Bank. If consumer sentiment, business confidence and economic growth perform sluggishly, we may see the Reserve Bank cut rates again.”
If you want to learn more about your home loan options, call (02) 9833 8177 or visit www.mortgagechoice.com.au/Des.Nation .
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This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.
About Mortgage Choice
Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.
Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.
Since that time, the company has grown and developed into a fully fledged financial services provider.
Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.
Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified financial advisers.
Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).
Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.
Recent recognition: 2014 Australian Broking Awards Best Diversified Program; 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education; No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list.
Visit www.mortgagechoice.com.au or call customer service on 13 77 62.