Global financial markets might be shaky, but the Reserve Bank of Australia looked at the strength of the Australian economy when making this month’s decision to leave the cash rate on hold at 2%.
The latest decision should give consumers confidence that the Reserve Bank is not rattled by what’s happening globally. When looking at the figures here at home, the economy appears to be enjoying moderate growth.
Consumer sentiment and building approvals are up, as are property prices in the capitals. Given that property prices continue to rise, the Reserve Bank is hesitant to cut interest rates for the third time this year. And with other signs pointing to strengthening economic performance, the need for such measures was not necessary this month.
Should the global situation continue to deteriorate, however, the Reserve Bank may need to reconsider its position. But if economic signals continue as they have been, it’s unlikely we will see such measures, as another cut would only add to rising property prices in Sydney and Melbourne.
Given that rates have been low for so long, many lenders are starting to speculate about whether a rise could be on the horizon. If you are wondering whether you could get a better deal for your home loan, or if you should fix interest rates while they are low, contact me for a comparison from more than 20 lenders.
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