RBA RATE ANNOUNCEMENT The Reserve Bank of Australia has announced the outcome of its monthly board meeting. The central bank today opted to keep the official cash rate on hold at 2.5 per cent. This decision came as no surprise, with the board previously indicating it expects a period of stability in interest rates. RP Data national research director Tim Lawless said the board would be happy with the effects of current monetary policy settings on the domestic economy, with a strong property market now driving increased investment in dwelling construction. “More housing market activity has translated to greater developer confidence and a consistent upwards trend in new building approvals,” he said. Key housing market metrics produced by RP Data continue to indicate buyer demand remains strong across the housing market. “Auction clearance rates have consistently been around the high 70 per cent mark since mid-February and mortgage demand, as measured by activity across the RP Data valuation platforms, was at record daily averages during February, according to Mr Lawless. “As long as mortgage rates remain low we would expect housing market conditions to remain in positive growth territory, at least in trend terms,” he added. Todays decision means the cash rate has now remained unchanged at 2.5 per cent since August of last year. Thoughts by myself - Andrew Salsbury Australian Finance Centre The current interest rate is making affordability for that more expensive property purchase but I would exercise a caution of err, should interest rates rise in the coming years, can you afford the loan if it goes up by 1.5% say. More importantly we have sustained years of high living expenses and consumer debt with high credit card interest, having low interest rates now is a great opportunity to build the buffer in your mortgage, pay down or refinance those cards and start to create a better lifestyle. A budget is also a great way to go, if you do not know how much you spend and if this is not monitored then how do you know you can afford your financial liabilities, or the potential to invest further
Posted on: Tue, 04 Mar 2014 05:55:58 +0000