The Reserve Bank of Australia has opted to leave rates on hold at 2% for the fifth consecutive month this year.
Today’s decision follows an interesting month for the Australian economy, which saw the Australian dollar fall and a change of political leadership for the country. Interestingly, however, research by ANZ and Roy Morgan showed that consumer sentiment rose by 8.7% in the week after Malcolm Turnbull ascended to prime minister.
In the past a spill has resulted in lower consumer confidence, so it is likely that the Reserve Bank is waiting to see how the new leadership will affect the economy.
The lower Australian dollar has also been good news for the economy, giving a number of industries a chance to pick up again. This has led to growth, which took some of the pressure off the Reserve Bank’s decision today.
These factors combined with easing growth in Sydney property prices were enough for the Reserve Bank to sit tight at 2%. Given the current economic climate, many economists are predicting that interest rates are unlikely to change until well into next year.
This decision is welcome news for homeowners, who are becoming accustomed to historically low interest rates on their mortgages. While it is tougher to get a good deal on an investment loan at the moment, banks are eager to get new business from owner-occupiers. If you are looking to purchase property or refinance, there are plenty of discounts, interest rate incentives, cash-back deals and fee waivers around for you to take advantage of.