The Reserve Bank of Australia (RBA) has decided to keep the cash rate at 2 per cent, marking the third month in a row of rates historic lows. The decision was made earlier this week and is in line with what economists had previously anticipated. This has led to heightened expectation that rates will not see a cut again in the current cycle.
In a statement on the monetary policy decision, Governor Glenn Stevens of the RBA remarks that while the global economy is expanding at a moderate pace, the rate of growth in Australia is still below longer-term averages. He also remarks that inflationary pressures are contained with the economy likely operating with spare capacity for some time yet.
Inflation is expected to remain on target over the next year or two even with lower exchange rates.
“In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending. Credit is recording moderate growth overall, with growth in lending to the housing market broadly steady over recent months,” Stevens said.
The RBA is currently working with other regulators to assess and contain risks that apply to the property market.
“The Board today judged that leaving the cash rate unchanged was appropriate at this meeting. Further information on economic and financial conditions to be received over the period ahead will inform the Board’s ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.”
What it Means for First Home Buyers
Tim Lawless, CoreLogic RP Data Head of Research, notes that previous cuts made by the RBA back in February and May are already stimulating the property market.
With rates at record lows, lenders remain very competitive so new borrowers have plenty of opportunities. The stable rates mean that first home buyers can spend more time finding the best mortgage rates available and secure pre-approval with their preferred lender.
Those seeking to buy in Sydney or Melbourne should act quickly as property in these areas are selling at a fast pace.
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Buying a new home is a major milestone.
But it can also be an overwhelming prospect from finding the right location to securing financing with a reputable lender. The process can be especially confusing for those new to the market. Which can potentially lead to costly mistakes or missing out on available grants.
FHOC is a leading home builder in Perth with extensive industry experience. Our professionals work closely with you at every step to design, build, and finance the home of your dreams. With rates at record lows and the First Home Owner’s Grant increased to $10,000 for West Australians, now is the perfect time to build your new home.
Contact us today for more details and we will be happy to provide additional information.
First Home Owners Centre Contact Information
24/7 Sales Enquiry Line: (08) 6144 1088