Reserve Bank leaves interest rates on hold
In a decision that may have surprised many people, both market experts and borrowers alike, at its meeting last week the Reserve Bank of Australia elected to leave the official cash rate on hold at 4.25 per cent.
This rate decision, the RBA’s first for 2012, followed two consecutive rate cuts in both November and December last year after having been left unchanged at 4.75 per cent for a year.
Despite the decision, from our position at CENTURY 21, we do not necessarily believe that property purchasers will be dissuaded from entering the residential real estate market as a result.
As CENTURY 21 Chairman and Owner Charles Tarbey commented last week, “While a rate cut would have provided buyers with an added incentive to enter the property market, we saw two consecutive rate cuts in 2011 and this stabilisation still provides buyers with attractive finance and refinancing options.”
Charles also noted that while the decision provides no immediate relief for the residential property market, it does give the Reserve Bank scope to cut rates should conditions in both the domestic and international economies require as such over coming months.
In his statement following the decision, Reserve Bank Governor, Glenn Stevens, commented that the Board judged the current setting of monetary policy as appropriate for the moment. The statement noted that economic growth is expected to be close to trend and inflation is close to target, and financial pressures in Europe alleviated considerably late in 2011, although work still needs to be done in the region.
Will the Reserve Bank cut rates in March or throughout the year? It is yet to be clear, however many pundits seem to think this could occur. Whether they do or do not, for those home buyers and investors in a financial position to buy and who have sought the appropriate professional advice, the market continues to provide fortuitous buying opportunities.
As Charles Tarbey points out, “With improved housing affordability, excellent purchase opportunities on the market, and attractive financing packages available, home buyers and investors can still look to secure an advantageous property purchase with a low fixed-rate mortgage.”
For more information about suitable property purchase options in your area, please feel free to contact your local CENTURY 21 real estate agent for expert, clear advice.