The Reserve Bank of Australia’s latest decision regarding the official cash rate has been revealed.
The RBA has decided to leave the official cash rate on hold at 2.00 per cent following its September meeting.
That result is in line with a majority of industry predictions, including all six of the investment commentators Which Investment Property spoke to ahead of the decision.
Property academic and author, Peter Koulizos, believes that rates will be cut again, but that not enough data was available to justify a cut today.
“In my opinion, rates will remain unchanged tomorrow. I think rates will drop again soon but the RBA doesn't have enough data to date to support a drop in rates tomorrow,” he said yesterday.
Jonathan Preston is a property investor who has worked in the finance industry for 10 years, and agrees with Mr Koulizos that another cut to rates is on the horizon.
However, he believes that the RBA is trying to hold off on any further rate cuts for as long as possible – meaning a cut was highly unlikely today.
“I believe that the RBA only has a few bullets left [two 25 basis point cuts maximum], so they are holding off as long as possible. If economic conditions continue to head in such a negative direction, it is likely they will cut the rates at least once more over the coming three to six months,” he said.
Investor Julian Lancey disagreed with this sentiment – pointing to the betting odds as an indication that the cash rate will remain on hold for some time to come.
“What will happen today? Rates will be left on hold. I know this as a certainty. And how do I know this? Because of the punters!” he said.
“If you look at betting odds rates, RBA rates will be left on hold at 1.04 – this is to say if you put a bet on of $100, you will only win $4. [There’s] nothing in it. No need to read long articles written by people in suits dropping big words to make them feel better about themselves – check out what the punters' odds are. They're on hold today and they'll be on hold for a while longer.”