11 Months of Zero Change
For the 11th consecutive month, the Reserve Bank of Australia has decided to leave the official cash rate on hold at 1.5%.
According to the majority of economists, today’s decision was “largely unsurprising”.
Indeed, each cash rate decision by the Reserve Bank of Australia is a delicate balancing act. The Board have to look at all of the economic data – both locally and globally – and then make their cash rate decision based off the back of that data. And, over the past month, the economic data would suggest that the Australian economy is tracking along quite nicely.
Property values bounced slightly higher in June, while the unemployment rate fell even further. In addition, business growth remains anaemic, while consumer sentiment remains relatively sluggish.
According to the latest Westpac Melbourne Institute Index of Consumer Sentiment, confidence slid 1.8% throughout June.
Increased pressures on family finances combined with renewed concerns about the economic outlook ultimately drove the latest drop in consumer sentiment.
But while confidence has deteriorated, property values are, once again, on the rise. The latest data from CoreLogic found property values across the combined capital cities rose 1.8% throughout the month of June, taking the median dwelling value to $635,000.
From a local perspective, imsold property said today, “…stock levels in both investment and residential opportunities in the Noosa property market are still tight. This in turn has the effect of putting pressure on prices, so our sellers are getting good results and the buyers often need to jostle for the best position to secure their ideal property. That said, we are still witnessing some very pioneering and adventurous listing prices for some properties, and that equates to many more days on market…and possible property stagnation! …we urge sellers to seek out professional representation from an Estate Agency like imsold property that can confidently value-add to an interested buyer, yet maintains a policy of transparent pricing when listing properties for sale…this is where we come in to our own…”
And the good news didn’t just begin and stop with the property market, with data from the Australian Bureau of Statistics showing that the unemployment rate actually fell from 5.7% in April to 5.5% in May.
When you look at all of these data points together, it is fair to assume that the Australian economy continues to perform relatively well, providing the Reserve Bank with all the incentive it needed in order to leave the cash rate on hold once more.
Local Mortgage Choice Broker, Ian Robinson notes that while the cash rate remains untouched at 1.5%, Australia’s lenders continue to tweak their pricing and policy.
“In the last week alone, we have seen a number of the major lenders increase their interest only pricing. Anyone in an interest only loan should take the time to look at their situation and make sure they are still in the right product for their needs.”, he said.