The Reserve Bank of Australia’s decision regarding the official cash rate has just been announced.
The RBA has resolved to keep the official cash rate on hold at 2.00 per cent following its meeting this afternoon.
The decision is in line with the predictions of the majority of Which Investment Property’s commentators.
Liz Sterzel, managing director of Property Wizards, said that changes to the political landscape and respectable retail spending figures meant it was too soon for the RBA to consider a downward shift.
“On the positive side, retail sales are up, the economy is moderating but still growing and the new Prime Minister is aiming to restore confidence in the economy,” she said.
“The low Australian Dollar is helping the economy by making exports and tourism more attractive and the record low interest rates are helping lift construction and services investment.”
Alan Fox, director of Propertunity, predicted that recent lending changes have dissipated the need for any rate movements – citing auction performances as evidence of their impact.
“I predict the RBA will leave rates on hold in October. The APRA clampdown seems to be biting and having the desired effect on lessening investor demand. Auction clearance rates have been coming off the boil,” he said.
Investor Julian Lancey correctly predicted the decision – stating that reduced activity in Sydney and Melbourne meant any upwards shift to rates was totally out the question.
“Rates will not go up, they will not go down, they will stay the same. This is a sure thing,” he said.
“What a great month of property news it's been. The biggest news for me was reading that the auction clearance rate has decreased from its peak in the 90 per cent to now in the early 70 per cent – one of the first [signs] that the boom is over. Why? Maybe the increased interest rates for investors, maybe that some banks are asking for more of a deposit for these new 'risky' postcodes, maybe investors are looking at other cities.
“Regardless, the Sydney and Melbourne property hysteria is calming down and property articles are making their way back into the back of the newspaper.”