The Reserve Bank of Australia continues to maintain its confidence in the Australian economy and ongoing global recovery and has decided to leave the official Australian interest rate unchanged at 3% at its September meeting.
They have constantly reminded markets that it had room to cut rates further if it had to but had refrained from doing so since the last rate cut in April 2009.
This shows their underlying confidence in the economy yet provides a level of further protection should it be necessary. With China and other international economies now starting to show green shoots of growth this is unlikely to be necessary and we expect interest rates to remain unchanged in the near future then slowly trend upwards by 0.25% to 1.0% over the next 18 months.
This will still leave rates at very attractive levels and means property holding costs will remain at historic low levels throughout the short to medium term.
Fixed rates have already crept up from their lows in April 2009 and the 5 year rates are now over 2% higher than the current variable rates which adds weight to the argument that rates are more likely to rise than fall in the coming 24 months, albeit not likely to be any significant amount or pace.
With confidence returning to the property markets and under supply this should result in a boost to prices in the short to medium term, providing a welcome lift to property investors.
Click here to read the RBA Statement on Interest Rates
They have constantly reminded markets that it had room to cut rates further if it had to but had refrained from doing so since the last rate cut in April 2009.
This shows their underlying confidence in the economy yet provides a level of further protection should it be necessary. With China and other international economies now starting to show green shoots of growth this is unlikely to be necessary and we expect interest rates to remain unchanged in the near future then slowly trend upwards by 0.25% to 1.0% over the next 18 months.
This will still leave rates at very attractive levels and means property holding costs will remain at historic low levels throughout the short to medium term.
Fixed rates have already crept up from their lows in April 2009 and the 5 year rates are now over 2% higher than the current variable rates which adds weight to the argument that rates are more likely to rise than fall in the coming 24 months, albeit not likely to be any significant amount or pace.
With confidence returning to the property markets and under supply this should result in a boost to prices in the short to medium term, providing a welcome lift to property investors.
Click here to read the RBA Statement on Interest Rates
