Tuesday, September 24, 2013
Tuesday, August 6, 2013
RBA Alert - cash rate at an all time low of 2.5%
The Reserve Bank has unsurprisingly
decided to cut interest rates this month indicating increased concern over the
prospects for the national economy. Rates have now fallen by 2.25 percent since
the current easing cycle commenced in November 2011 and are now at a record low
2.5 percent.
Latest data supports the gloomy
economic outlook with the jobless rate rising over June and building approvals
down sharply over the month. The lower dollar and a recovering sharemarket are
however a positive together with increased buyer activity in the housing
market.
Housing markets continue the revival
generally evident over the past year and fuelled by historically low interest
rates. Solid to strong house price growth is now being recorded in most capital
city markets as buyer activity and confidence continues to rise.
"The Reserve Bank has unsurprisingly
decided to cut interest rates this month to offset the real prospect of sharply
declining economic activity. The bias for interest rate settings will remain
downwards in the near future with the level of unemployment the key to further
rate cuts", says Dr Andrew Wilson Senior Economist for Australian Property
Monitors.
"Home buyers and mortgage holders will
welcome lower rates when passed on by the banks and this will add fuel to an
already strong mid-winter performance by most capital city housing markets.
Although home buyer activity thrives on low interest rates, the key to sustained
growth in housing markets is a healthy economy and low unemployment".
Tuesday, May 7, 2013
INTEREST RATE ANNOUNCEMENT
The Reserve Bank surprised today by
announcing a cut in the official interest rate by 0.25 percent to a new record
low of 2.75 percent.
Today's announcement followed three months of rates on hold
with the last cut of 0.25 percent in December last year.
Rates have now fallen by a full 2
percent since the beginning of the current easing cycle in November 2011.
Action by the Reserve Bank today
indicates concerns by the Bank over the recent performance of the economy,
particularly in regard to rising unemployment and declining national income.
Some sections of the Australian
economy are clearly still in need of further stimulus with the Reserve Bank
choosing to act while inflationary pressures remain benign.
Housing markets however have been a
beneficiary of low interest rates this year with forward indicators such as
auction clearance rates and housing loans clearly ahead of last year
results.
"A further cut in interest rates, when
and if passed on by the banks, will provide continued stimulus to strengthening
housing markets through autumn and into winter", says Dr Andrew Wilson, Senior
Economist for Australian Property Monitors.
"Lower interest rates and rising home
buyer confidence are set to continue to generate house price growth although the
performance of local economies remains the key as indicated by today's interest
rate decision".
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