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C&G on February’s RBA Announcement
After the first RBA Board meeting of the year on Tuesday, Reserve Bank Governor Glenn Stevens announced that interest rates would remain unchanged at 2.5%. This marks the sixth successive month that the cash rate has been on hold - an outcome widely expected by industry leaders and experts. Today at C&G we take a look into what this means for the Australian property market.
Dr. Andrew Wilson, Australian Property Monitors Senior Economist, spoke of the already marked improvements in the housing industry over the past year - “Those low interest rates have really activated housing markets right throughout Australia.” The last six months in particular have seen a distinct stimulus of median house prices across housing markets
Stevens indicated a likelihood of the hold persisting, stating, “On present indications, the most prudent course is likely to be a period of stability in interest rates.” Terry Hall of Mortgage Choice responds, advising that “With this in mind, now may be a good time for Australians to jump onto the property ladder and take advantage of this low rate environment.”
This stabilisation has also encouraged a growth in the building sector. The official announcement from the RBA draws on new data collected since December, which “suggests slightly firmer consumer demand and foreshadows a solid expansion in housing construction.” The Financial Review also mentions that construction approvals are on the up, and “property prices are around 10 per cent higher than a year ago. Business and consumer sentiment has also improved.”
Generally speaking, the move to keep interest rates at a steady 2.5% provides an accommodating environment for those in the property market in 2014. Stevens states “long-term interest rates and most risk spreads remain low,” and that “equity and credit markets remain able to provide adequate funding.” This continued rates stasis has generated what has now become a balanced period – paving the way for confident buyers to take the housing market upwards this year.
Chisholm and Gamon have already established a sales trend indicating consistently positive growth in 2014 – and we look forward to assisting you find the perfect property in our tightly-held Bayside community.