March to a happier tune: cash rate hold shouldn't dampen spirit

Mortgage Choice points to positive greenshoots in the market  

The Reserve Bank of Australia’s announcement to keep the cash rate steady for the month ahead shouldn’t dampen the spirits of property owners and buyers, advises national mortgage broker, Mortgage Choice.  

According to local Mortgage Choice mortgage broker, Melissa Jackson, there are plenty of positive signs of an emerging uplift in conditions, particularly in sectors of the economy that correlate closely to interest rate movements, including the property and housing finance markets.   

“The decision by the Reserve Bank to leave the cash rate at 3% in March, as expected by majority of market commentators, need not be seen in a negative light by anyone watching the property market. We are seeing encouraging signs in the economy that should lead to further positive consumer and business sentiment,” said Melissa.  

“For a start, home loan interest rates are at historic lows, and any future cuts will be icing on the cake for existing borrowers and those looking to get into the property market.  

“In addition to low rates, employment remains strong, with the Australian Bureau of Statistics placing unemployment levels at 5.4%. In fact, the unemployment rate has remained below 6% for almost 10 years now – the last time it was above this measure was back in July 2003, when it was 6.1%.  

“Property prices now appear to be on the rebound, with national home prices rising by 1.3% over the year to February, according to the latest research by RP Data. Depending on a person’s property investment strategy, this may not be viewed as good news by those looking to get into the market now but it shows better long-term capital growth prospects. 

“All these signs point towards an improving domestic economy and property market, and a likely lift in the spirits of both buyers and borrowers.”  

Melissa finished by saying, “As always, exactly what the future holds is unknown, but if the current signs in the economy hold the clues, then it looks like the greenshoots could continue to sprout.”  

“However, this doesn’t rule out the possibilities of further cash rate cuts. With a peak in the mining industry expected later this year, there is still uncertainty around whether the non-mining sectors will be able to fill the gap. Working to balance a two speed-economy, the Reserve Bank has stated that it has the capacity to lower the cash rate, should the need arise.”  

Visit Melissa Jackson’s website at www.mortgagechoice.com.au/melissa.jackson or call 0405 315 227.    

For further information or to arrange an interview please contact:  

Melissa Jackson              

Mortgage Choice

04045 315 227

melissa.jackson@mortgagechoice.com.au

About Mortgage Choice  

Mortgage Choice has sourced a home loan for well over 350,000 people since 1992. It works with all manner of property finance borrowers via hundreds of franchises.  

The company writes one in every 25 home loans in Australia by providing professional guidance on, and choice of, products offered by an extensive panel of leading lenders. Many of its brokers provide a broader service, helping customers source commercial and personal loans, asset finance, deposit bonds and providing referrals for risk and general insurances.

Uniquely, Mortgage Choice pays its franchisees the same commission rate for home loans they write, regardless of rate paid by the lender a new customer selects, working in the customer’s best interests to tailor a solution to them.  

To cater to the growing needs of its customers, Mortgage Choice soft-launched in October 2012 its new financial planning business. Mortgage Choice Financial Planning will officially launch in FY14.  

The company 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).   Recent recognition: 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2012 Australian Broking Awards Best Training and Education; 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 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; and 2010 Forbes Asia-Pacific Best Under A Billion list.  

Mortgage Choice holds an Australian Credit Licence: no. 382869, issued by ASIC.  

Visit www.mortgagechoice.com.au or call customer service on 13 77 62.  

Posted in: Interest rates

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