For the tenth month in a row, the Reserve Bank of Australia has left the cash rate at the historically low rate of 2%. In what is becoming a familiar monthly tale, the Reserve Bank is taking a wait-and-see approach to monetary policy.
In his statement following the March meeting, Reserve Bank governor Glenn Stevens explained that Australia has reasonable prospects for continued growth. This forecast comes in spite of unsteady global markets. Around the world, central banks are lowering cash rates, but this hasn’t had the desired effect in many countries. The Reserve Bank is taking a more cautious approach by leaving rates on hold.
This decision may seem contradictory to the glum economic picture being painted in the media, but there has been some positive news in the last month. The most recent Westpac Melbourne Institute of Consumer Sentiment found that consumer confidence rose by 4.2% in February.
Many experts predict rates won’t change until May at the earliest, although there’s no way to know what will happen between now and then. This speculation is due to a decline in both business confidence and building approvals. In addition to these conditions, it is likely that the Reserve Bank will also watch unemployment levels and the Australian dollar over the next month.
What the cash rate decision means for home owners
While the cash rate has remained steady, there are movements in the interest rates being offered by lenders. This competiveness is great for home owners and borrowers, who have increased bargaining power when it comes to negotiating a better deal on their mortgages.
The Brisbane property market stats you need to know
- Official cash rate: 2%
- Brisbane median house sale price (January): $595,000
- Brisbane median unit sale price (January): $450,000
- Auction clearance rate: 55%
- Best available variable interest rate: 3.99%
- Best available fixed interest rate: 3.99%
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