No eyebrows were raised when the Reserve Bank of Australia's (RBA) board decided that it would keep the cash rate at two per cent. This rate is a record low that has gone unchanged since May and will stay in effect until the board meets again next month.
The statement from Reserve Bank Governor Glenn Stevens indicates a key driving factor for this decision, which is that the monetary policy needs to accommodate what he believes to be an economy with spare capacity to stretch. The low cash rate will encourage borrowing, investing and spending, which could indeed help support this effort.
Some are even predicting a further cut in the cash rate to further this goal of economic growth.
Dr Harley Dale, chief economist of the Housing Industry Association (HIA), sheds light on this matter, saying that "regardless of whether there is a further interest rate cut or not, the RBA has done its job in providing interest rate stimulus to the Australian economy". Dale now calls on swift policy reform in order to fully take advantage of the cash rate and bolster the wider economy.
Tim Lawless, CoreLogic RP Data's head of research, commented that while Sydney's and Melbourne's housing markets don't really need any further stirring, those in many other capital cities have seen sustainable but soft growth, and will benefit from this cash rate.
If you're in the market for Bentleigh real estate, this will come as good news to you. A report from CoreLogic RP Data perceives a slowdown in Melbourne property value growth, and the low cash rate should keep interest rates on home loans down, making it a good time to house hunt.
If you find yourself needing a helping hand, don't hesitate to give Matt Hurlston and the team at Ray White Carnegie a call. We'll guide you every step of the way to make sure you find a home you're happy with.