The Reserve Bank yesterday held the official cash rate at the all-time low of 1.5% for the 11th consecutive time, having last moved the OCR in August, 2016
The Reserve Bank yesterday held the official cash rate at the all-time low of 1.5% for the 11th consecutive time, having last moved the OCR in August, 2016
RBA governor Philip Lowe said in a statement, “Conditions in the housing market vary considerably around the country. Housing prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease. In some other markets, prices are declining.
“In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases remain low in most cities. Investors in residential property are facing higher interest rates. There has also been some tightening of credit conditions following recent supervisory measures to address the risks associated with high and rising levels of household indebtedness.”
He noted the growth in housing debt has outpaced the lagging growth in household incomes.
“The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
Rates set to stay low
1300 HomeLoan managing director John Kolenda said the all-time low cash rate could stay on the sidelines for another year.
“Despite some speculation of rate increases over the next year or so, the RBA has highlighted the fact recently that a range of negative factors will keep official interest rates low,” Kolenda said.
“The central bank has noted that the impact of the global financial crisis still lingers with sluggish company investment, low wages growth and weak inflation present.”
He said the RBA would carry out any future upward rate movement with “extreme caution” because of the “potentially disastrous impact on consumers and the wider economy”.
Mortgage Choice chief executive officer John Flavell also expects the cash rate to stay put for a while yet.
“Regardless of what the Reserve Bank chooses to do with the official cash rate over the coming months, one thing is clear: interest rates will remain relatively low for the foreseeable future,” he said.
Flavell said the Reserve Bank would be aiming to balance the strong Australian dollar with soft inflation and ongoing changes in the lending markets.
“Over the last couple of months, many of Australia’s lenders have adjusted the pricing across their suite of home loan products. Many continue to lift the price of their interest only loans for both investors and owner occupiers. As such, the spread between principal and interest and interest only pricing is now approximately 80 basis points.
“We have also seen some change in the property markets, with areas like Sydney and Melbourne continuing to perform strongly.”
RBA governor Philip Lowe said in a statement, “Conditions in the housing market vary considerably around the country. Housing prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease. In some other markets, prices are declining.
“In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases remain low in most cities. Investors in residential property are facing higher interest rates. There has also been some tightening of credit conditions following recent supervisory measures to address the risks associated with high and rising levels of household indebtedness.”
He noted the growth in housing debt has outpaced the lagging growth in household incomes.
“The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
Rates set to stay low
1300 HomeLoan managing director John Kolenda said the all-time low cash rate could stay on the sidelines for another year.
“Despite some speculation of rate increases over the next year or so, the RBA has highlighted the fact recently that a range of negative factors will keep official interest rates low,” Kolenda said.
“The central bank has noted that the impact of the global financial crisis still lingers with sluggish company investment, low wages growth and weak inflation present.”
He said the RBA would carry out any future upward rate movement with “extreme caution” because of the “potentially disastrous impact on consumers and the wider economy”.
Mortgage Choice chief executive officer John Flavell also expects the cash rate to stay put for a while yet.
“Regardless of what the Reserve Bank chooses to do with the official cash rate over the coming months, one thing is clear: interest rates will remain relatively low for the foreseeable future,” he said.
Flavell said the Reserve Bank would be aiming to balance the strong Australian dollar with soft inflation and ongoing changes in the lending markets.
“Over the last couple of months, many of Australia’s lenders have adjusted the pricing across their suite of home loan products. Many continue to lift the price of their interest only loans for both investors and owner occupiers. As such, the spread between principal and interest and interest only pricing is now approximately 80 basis points.
“We have also seen some change in the property markets, with areas like Sydney and Melbourne continuing to perform strongly.”
