For the seventh month in a row, the Reserve Bank has left rates unchanged at a historically low level of 2.50%. The decision upholds the longest run of rate stability since the cash rate peaked at 4.75 per cent in late 2010 and remained through to most of 2011. According to the RBA, the Australian economy is showing signs of increasing demand with improvements in the housing construction sector. There have been some indicators of improvement in business confidence with exports rising. However, investment in the resources sector is still expected to reduce significantly, along with a decline in public sector spending. On the employment front, unemployment continues to edge higher, with a slow-down in wage increases also being experienced. Given all these factors, the long term forecast for inflation is to remain in the 2% to 3% target over the next two years and the RBA expects a period of stability for interest rates. Interest rates remain one of the biggest factors influencing the Australian property market with the period of interest rate stability experienced over the past seven months contributing to homeowner and buyer confidence. Sydney experienced a very strong start to the 2014 selling season. The first auction Saturday of the season was on February 1 with 95 homes listed for auction and a clearance rate of 80%. Brisbane – which doesn’t have a big auction culture, recorded a 55% clearance rate. Sounds low but it’s actually above the long term average of 50%-ish. However McGrath Estate Agents CEO, John McGrath, notes that the strength we are seeing in Autumn is unlikely to remain all year. “The sort of frenzied activity we’ve seen in recent months can’t last forever, but 2014 will still be a great year for Sydney. I’m tipping 5-10% growth across the board. However the market to really watch this year will be South-East Queensland. That’s the market with the best potential for capital growth over the next few years and many commentators seem to agree.” Despite the RBA remaining unchanged, competition amongst lenders remains aggressive. We have seen a large number of lenders review rates, particularly in the fixed rates space. One, two and three year fixed rates are all available below 5% and depending upon your level of borrowings, variable rates are also available below 5%. If you would like to receive more expert guidance, please contact Oxygen Home Loans, the proud winner of the 2014 Best Broker Group at the NSW Better Business Awards
Posted on: Fri, 07 Mar 2014 02:56:14 +0000
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