Unchanged Cash Rate Highlights Australian Market Confidence
The Reserve Bank of Australia (RBA) announced yesterday (December 3) that the nation’s official cash rate would remain at the current low level, highlighting the nation’s improving economic situation and illustrating the strength of Australia’s current real estate market.
Governor Glenn Stevens from the RBA said the rate cut was to help “interest-sensitive spending”, which has resulted in the growth of finance demands from households – especially those looking into the housing markets.
A low cash rate usually translates into reduced interest rates from lenders, resulting in potentially more competitive home loan options being offered. This helps increase the number of people taking them out, through the growth in economic confidence across the nation.
The Chief Executive Officer for the Real Estate Institute of New South Wales, Tim McKibbin, welcomed the decision, stating that while it took the market a short while to respond, the results have been fantastic.
He highlighted the record number of auctions and strong clearance rates for Sydney’s real estate sector over the last few months as evidence of the growing confidence being experienced across the market.
This has also been supported by the Housing Industry Association (HIA), with Chief Economist Dr Harley Dale stating that the sector’s recovery since the rate cuts began earlier this year has been encouraging.
“The residential construction industry can be a key driver of the rebalancing of growth given the large reach that new home building and renovations activity has into wider areas of the economy, most notably retail and manufacturing,” said Dr Dale in a December 3 statement.
If you’re looking into purchasing established property, or land for off the plan development, now could be the perfect time to consider taking the plunge and securing a home loan.
With the cash rate remaining steady as we head into the new year, purchasing property could be a great resolution to make for 2014.