At its Board meeting yesterday, the Reserve Bank of Australia cut the cash rate, as widely expected, to 2.5 per cent – its lowest in more than 50 years. The market should expect the major banks to pass on an expected rate cut in full and swiftly but low mortgage rates are already having the desired effect. Transaction numbers continue to rise and the national house price climbed 2 per cent in June. This scenario of rising demand but contained value is likely to be exactly what the RBA is seeking from the national housing market. If this latest rate cut is passed on in full, it will cut almost $50 a month on repayments on an average $300,000 mortgage. The September RBA board meeting will be in the final week of the election campaign.
Posted on: Wed, 07 Aug 2013 01:14:05 +0000