For the second consecutive month, the Reserve Bank of Australia (RBA) has elected to leave the cash rate on hold at the record low of 1.50%. New RBA Governor Philip Lowe had this to say in his official statement:
“Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.”
“Supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. Growth in lending for housing has slowed over the past year. Turnover in the housing market has declined. The rate of increase in housing prices is lower than it was a year ago, although some markets have strengthened recently. Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in rent is the slowest for some decades.”
So, what does all this mean for you? In recent months, a number of lenders have moved out of sync with the RBA Cash Rate, meaning that change can come at any time. Keep a close eye on any rate movement, and consider whether your current loan is the right one for you, right now.