RBA holds interest rates at 2.25 per cent for April
Once again, the Reserve Bank of Australia has held interest rates at 2.25 per cent for April. This is the second month in a row that interest rates have remained at 2.25 per cent, after dropping from 2.50 per cent in February.
This comes as good news for property owners, including first time buyers who can take advantage of the lower mortgage repayments. However, according to Tim Lawless, CoreLogic RP Data’s head of research, there is likely to be a rate cut later in the year which will push home values up.
Mr Lawless states, "The buoyant housing market conditions should continue to support growth in housing construction which in turn provides a strong multiplier effect on the Australian economy, with increased housing activity flowing through more spending on items such as building materials, appliances, home furnishings and white goods.”
"More importantly, with population growth slowing and construction increasing the disconnect between housing demand and housing supply is also reducing which may also alleviate some of the increases in home values."
Many people were expecting a rate cut this month in line with the falling iron ore prices which has dropped by 25 per cent since the RBA’s last interest rate cut, whilst the Australian dollar has only fallen by just a few per cent.
However, with the Australian dollar expected to slowly gain strength against the US Dollar, it is thought that a rate cut might be introduced next month in May to inspire consumer confidence before the federal budget gets announced.
Published on 8th of April 2015 by Marty Stanowich