December 03, 2013
It seems the Reserve Bank’s rate-cutting cycle has officially come to an end, with the Reserve Bank opting to leave the official cash rate on hold for the fourth consecutive month.
At its Board meeting earlier today, the Reserve Bank of Australia erred on the side of caution and left the cash rate on hold at 2.5% after new data found consumer confidence is on the up.
The renewed surge in consumer sentiment was buoyed by the strength of the Australian economy
The latest Westpac Melbourne Institute Index of Consumer Sentiment increased by 1.9% in November. According to the Index, this result can be attributed to a number of things including a stable unemployment rate and sound house price growth.
Research by RP Data shows house prices rose by 1.9% over the September quarter. This subtle growth in dwelling values is encouraging consumers to be more optimistic about the state of the economy.
The positive results recorded by the Westpac Melbourne Institute Index of Consumer Sentiment aligned nicely with Mortgage Choice’s recent consumer sentiment survey, which also found the majority of Australians are now confident about the state of the economy.
More than 55% of Australians believe the economy will remain strong throughout 2014. This is no doubt a result of the recent spate of positive economic data.
The unemployment rate is sitting at just 5.7%, the Consumer Price Index continues to outperform expectations and the total value of dwelling finance commitments jumped 5.3% in September.
With all of this positive data spilling out of the Australian economy, it was largely unsurprising to see the Reserve Bank leave the cash rate untouched this month.
The Reserve Bank’s decision to leave the cash rate untouched means interest rates continue to hover around record lows. As such, now may be a good time to consider jumping onto the property ladder.
If you are considering purchasing a home in the near future, now may be a good time to capitalise on the current state of the market – before the Reserve Bank lifts rates and property prices climb to new highs.
Alternatively, if you already have a property, now could be a good time to review your current home loan and check to make sure you are still in the right product for your needs.
If you want to learn more about your home loan options, call us on 9432 6070 or click on the 'contact us' tab at the top of this page.