With the cash rate on hold again, will demand for fixed rate loans continue to rise?
The Reserve Bank of Australia has decided to keep the cash rate on hold at 1.50% for October. In the statement following the meeting, new Governor Philip Lowe painted a cautiously optimistic picture. For homeowners, he highlighted that while property growth has slowed recently, prices are still strengthening.
“Turnover in the housing market has declined,” he said. “The rate of increase in housing prices is lower than it was a year ago, although some markets have strengthened recently.”
This statement comes after new data from Domain revealed that asking prices for properties in Brisbane have risen by a total for 4.2% in the last 12 months, and 0.2% over the last quarter.
A stable property market here in Brisbane together with continued low interest rates has many home owners starting to reassess their position. Demand for fixed-rate loans is increasing, with many borrowers speculating that rates won’t drop any further.
Whether or not that is the case remains to be seen. The next set of inflation figures is out later this month and if they are below target, the Reserve Bank may consider moving rates in November. These figures will indicate to the Board whether the August rate cut is having the desired effect.
Other factors the Reserve Bank will be watching this month are housing prices in Sydney and Melbourne, the Australian dollar and our continued transition away from mining.
Latest Brisbane property market stats
- Official cash rate: 1.50%
- Brisbane median house sale price: $612,000*
- Brisbane median unit sale price: $508,500*
- Auction clearance rate: 56%
- Interest rates starting from 3.74% p.a.
*These are the latest CoreLogic RP Data figures from August, 2016. They are based on sales data from the Brisbane City Council region only.
– Luke Cashin
0419 733 862 | email@example.com
Your Garden City Mortgage Broker, Brisbane