From Brexit to the federal election, it’s been a month full of uncertainty both at home and abroad. Meeting while the votes from the weekend’s election are still being counted, the Reserve Bank of Australia found itself in a unique position today.
Deciding to see how the election plays out, the Board opted to leave the cash rate at 1.75%. There are still too many unknowns floating around, especially with regards to inflation.
Another rate cut predicted for August
The nation will be watching closely when the next set of inflation figures are released on July 27, as these could be a trigger for another cut to the cash rate. The Reserve Bank has a mandate to keep inflation between 2–3%, and any data beneath this is a likely signal for a cut in August.
Regardless of what’s happening politically, this target is the Reserve Bank’s core focus. The cooling of the housing markets in Sydney and Melbourne have been another ongoing issue for the Reserve Bank, and the Board will need to decide whether another cut will fuel these markets further.
Governor Glenn Stevens didn’t give much away in his statement after the meeting, although he did acknowledge that he expects the next set of inflation figures to be low.
“Inflation has been quite low,” he said. “Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.”
Making the most of low interest rates
While rates are so low, there are a number of ways to get ahead on your mortgage. Consider maintaining your regular repayments rather than pocketing the savings. It might also be time to think about refinancing to ensure you are getting the best deal on your home loan.
The Brisbane property market stats you need to know
- Official cash rate: 1.75%
- Brisbane median house sale price: $ 588,065*
- Brisbane median unit sale price: $ 408,750*
- Auction clearance rate: 17%
- Best available variable interest rate: 3.89%
- Best available fixed interest rate: 3.74% (for a two-year term)
*These are the latest RP Data figures from May, 2016, which are down on the median sales prices from April, 2016. They are based on data from the Brisbane City Council catchment only.