Reserve Banks holds rates in July
At its monthly meeting in Sydney, the Reserve Bank of Australia (RBA) elected to hold the official cash rate at 3.5 per cent. CENTURY 21 expects the decision to have a relatively stabilising impact on the residential property market in a time marked by economic transition and uncertainty.
Following the decision, Chairman of CENTURY 21 Australasia, Charles Tarbey, said: “In a decision that should provide some stability for property owners, the Reserve Bank has put the official cash rate on hold - a move that we expect will bring some certainty to the domestic market.”
The decision follows back-to-back rate cuts in May and June, which resulted in the big four banks considerably lowering their interest rates. Such reductions functioned, in combination with changes to homebuyer concessions, to stimulate market activity in many areas and push national home values upwards over of the month of June.
Figures from RP Data-Rismark showed that capital city home values rose one per cent over June,
In his statement following the meeting, RBA Governor Glenn Stevens cited strong GDP growth, on-target inflation and improved domestic labour market conditions as key factors behind the decision.
“As a result of the sequence of earlier decisions, there has been a material easing in monetary policy over the past six months. The Board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate,” said Mr Stevens.
Despite maintaining the official interest rate in July, many analysts have predicted the RBA to make at least one further rate cut during the remainder of the year.
For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert, clear advice.