July 01, 2014
No great surprise today with the Reserve Bank of Australia leaving the cash rate on hold at 2.5 per cent for the 11th consecutive month.
Sluggish consumer sentiment and a slight fall in property prices last month were significant factors in the RBA's decision.
The latest Westpac Melbourne Institute of Consumer Sentiment survey showed consumer confidence climbing just 0.2 per cent in June, still 6.6 per cent below the pre-Budget level recorded in April.
Often consumer sentiment falls after a Federal Budget but usually bounces back strongly the following month. However, this doesn't seem to be the case with the latest Budget and would have been a significant factor in the RBA's decision.
Another factor weighing heavily on the RBA's decision was the slowing of property prices during the past quarter. Figures from RP Data show that national dwelling prices rose 1.4 per cent in June after falling 1.9 per cent in May.
With a strong economic outlook, stable property prices and significant monetary stimulus in place, it seems unlikely the RBA will move rates in the immediate future.
If you would like to take advantage of this low rate environment, call us today on 03 9432 6070 or click on the 'contact us' tab at the top of the screen.