As expected the Reserve Bank has left offical cash rates on hold at 2.50% yet again. This is the 7th consecutive month rates heave remained unchanged.
Ongoing strength in the Australian economy has given the Reserve Bank some much needed confidence in the current monetary policy setting.
The latest Monthly Business Survey conducted by National Australia Bank found business confidence is currently enjoying positive momentum, with business confidence recording its first rise in four months.
Data from the Australian Bureau of Statistics shows home loan approvals are also on the rise, lifting 0.2% in December 2013. Total dwelling commitments continue to increase month on month, which suggests the Reserve Bank’s previous rate cuts are finally starting to take effect.
On top of the strong home loan approval data and surging business confidence, consumer confidence currently remains comfortably in the zone where optimists outnumber pessimists.
The Australian economy is starting to show some real strength. As such, we expect the Reserve Bank to err on the side of caution and leave the cash rate on hold for the foreseeable future, which should encourage a greater number of potential home buyers onto the property ladder as they look to take advantage of the low interest rate environment.
Despite the cash rate remaining steady I have noticed several of the larger lenders reducung their 2 and 3 year fixed rates in recent weeks. This can be directly attributed to recent data showing the non major lenders are taking market share from the four majors due to some attractive fixed rates currently on offer.
If you are thinking of fixing or reviewing your home loan please feel free to give me a call on 0428 434084. I will only be too happy to advise the best rates on offer in the market place.