Interest rates held at 2 per cent again

The Reserve Bank of Australia (RBA) decided to hold the interest rate at 2 per cent for the fourth consecutive month.

The announcement on September 1 came as little surprise to many economists, who were either betting on the hold or a possible drop.

The RBA cites “moderate expansion in the economy” and said that inflation is “forecast to remain consistent with the target over the next one to two years”.

Even though growth is currently below the long-term average, the RBA believes that the spare capacity still in the economy will bolster the lagging rate. The room left to grow will hopefully be filled in the future.

For the time being, though, it sees inflationary pressures on the home front as being stable and “contained” for the time being.

This comes off the Australian Bureau of Statistics citing a decline in exports, mining and construction as the reason for the slowdown of economic growth.

What does this mean for the housing market and you?

The RBA has recognised that house prices in Sydney, as well as other parts of the country, are still rising. However, as the rates of increase are different for each city and region, it has delegated the responsibility of curbing a bubble to other regulators.

Even though APRA has clamped down on investor home loans recently, the record-low interest rate will continue to buoy house prices.

This is because first home buyer loans are made cheaper through lower interest payments.

If you’re looking to buy your first home in the future, and you want to shop around for the best rate for your unique situation, you should talk to a member of our team. Our mortgage brokers have access to a wide range of lenders and can figure out a solution to your specific situation.