For six months in a row now the cash rate has stayed on hold, giving home owners access to historically low interest rates. This year has started in the same manner, with the Reserve Bank of Australia keeping the cash rate on hold for February.
Right now the RBA is juggling a mixed bag of economic indicators. Growth has been lower than expected, as have inflation figures. Last year, Australia recorded just 1.5% growth in inflation, which is our lowest annual inflation rate in 19 years.
Meanwhile, house prices in Sydney and Melbourne have continued rising and it’s likely that a cut to the cash rate would fuel this growth even further. So the natural course of action for this month was to keep rates on hold as the RBA monitors the local economy as well as global economic affairs.
In his statement on the cash rate decision, Governor Philip Lowe did point to the recent interest rate rise in the USA, which many thought would be a catalyst for a rise here at home too. He also noted that following this decision in the USA, there is no longer an expectation for other major economies to cut rates.
Given the speculation that the cash rate will rise this year, many borrowers are currently taking stock of their options. It’s not always possible to know what’s ahead, so rather than trying to predict what will happen, consider your personal situation and whether the home loan you are in is the best one for your needs.
If you aren’t sure whether now is the time to lock in a fixed rate, I am happy to talk you through your options and compare the rates currently available.
Latest Brisbane property market stats
- Official cash rate: 1.50%
- Brisbane median house sale price: $640,000*
- Brisbane median unit sale price: $425,000*
- Auction clearance rate: 55%
- Interest rates starting from 3.73% p.a.
*These are the latest CoreLogic RP Data figures from November, 2016. They are based on sales data from the Brisbane City Council region only.