RBA leaves interest rates at a record low for October
There’s good news for home owners this month as the Reserve Bank of Australia has decided to keep the official cash rate at 2.5% for October – a record low. This rate has remained at 2.5% since August last year, and the last time this period of interest rate stability occurred was back in 2003.
This news is welcomed by those in the housing market, who can take advantage of the super-low interest rates and degree of certainty on their home loans which is creating strong demand for housing.
Developers are also taking advantage of building new apartments and off the plan complexes to help ease the housing shortage felt across Australia. However, housing prices are at a record high in Australian capitals such as Sydney and the competition to lend has also increased which favours investors. This is seeing an impact on some first home buyers who are being priced out of the market in certain areas.
Interest rates are expected to remain stable for a while, but it is speculated that they are likely to rise in mid 2015, or even by the end of 2015 and early 2016.
This mainly depends on the recovery of the US economy and the outlook for China where its economy has been slowing in recent months with falling commodity prices and a weakening property market.
It is important to remember that even though interest rates are at an all time low, borrowers should not over extend themselves and those purchasing property should have realistic expectations of the future price growth of their home.
Published on 20th of October 2014 by Marty Stanowich