What the RBA’s Melbourne Cup Day decision means for you
Coinciding every year with Australia celebrating the Spring Racing Carnival and Melbourne Cup Day, the Reserve Bank of Australia holds it November meeting.
Whilst many market analysts were anticipating a rate cut at yesterday’s meeting, the RBA has elected to keep the cash rate on hold at 2.0 per cent for another month. This is the sixth month in a row that the RBA has kept the cash rate on hold, after bringing it to down to the lowest levels in Australian history in February and May this year.
However, despite the RBA keeping the cash rate stable, interest rates have been on the move with the big four banks raising interest rates throughout October.
These rate rises – together with APRA’s tightening of controls on investment lending this year – have caused a slow-down in the rapid rise of home prices in major property markets such as Melbourne and Sydney, indicating that there may be room for a rate cut in the near future. Some analysts are predicting another cut in December this year, whilst others are speculating that it will occur in 2016, if at all.
Other economic factors may influence the RBA to leave rates at 2.0 per cent for the foreseeable future. The Australian dollar is holding at more acceptable levels – boosting tourism and our export markets. Employment is growing and consumer spending is improving – all proving that the RBA’s ‘period of stability on interest rates’ is starting to have the desired effect on our economy.
If your bank has recently raised your home loan interest rate, we encourage you to give us a call. Craig Forman, our mortgage broker has access to some of the market’s most competitive rates, and we are here to help if you’re a first home buyer, investor or just considering refinancing.
Source: Craig Forman, Cane Financial 4th November 2015 and www.rba.gov.au
