As Melbourne takes a day off to celebrate the Spring Racing Carnival and Melbourne Cup Day, the rest of the country has been eagerly waiting to hear if the Reserve Bank of Australia would cut the official cash rate at its November meeting today.
Whilst many market analysts were anticipating a rate cut today, the RBA has elected to keep the cash rate on hold at 2.0 per cent for another month. This is the sixth month in a row that the RBA has kept the cash rate on hold, after bringing it down to the lowest levels in Australian history in February and May of this year.
However, despite the RBA keeping the cash rate on stable, interest rates have been on the move with the big four banks raising interest rates throughout October.
These rate rises – together with APRA‘s tightening of controls on investment lending this year – have caused a slow-down in the rapid rise of home prices in major property markets such as Melbourne and Sydney, indicating that there may be room for a rate cut in the near future. Some analysts are predicting another rate cut in December this year, whilst others are speculating that it will occur in 2016, if at all.
Other economic factors may influence the RBA to leave rates at 2.0 per cent for the foreseeable future. The Australian dollar is holding at more acceptable levels – boosting tourism and our export markets. Employment is growing and consumer spending is improving – all proving that the RBA’s “period of stability on interest rates” is starting to have the desired effect on our economy.
If your bank has recently raised your home loan interest rate, we encourage you to give us a call. We have access to some of the market’s most competitive rates, so talk to us and we’ll shop around to get you the right deal. We’re here to help if you’re a first-home buyer, investor or just considering refinancing, so please get in touch today!
Director, Australian Mortgage and Financial Advisers
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