C&G's Guide to the June RBA Announcement


On Tuesday, Governor Philip Lowe and the Reserve Bank of Australia announced their decision to hold the cash rate at the all-time low of 1.5%. This was no surprise to economists, many of whom agreed that a hold was the most likely outcome of this month’s meeting.

Continuing concern around low wage growth and inflation supported the board’s decision to keep thing as they are, despite noting some improvements in weaker areas of the economy. Dr Lowe indicated that further lending restrictions may follow last year’s investor-focused tightening, though we are unlikely to see any movement on this until later in the year.

Despite the national cash rate remaining on hold, many lenders independently slashed rates further throughout May. Owner-occupier loans are being tweaked downwards by some lenders, while the only way is up for interest-only lending structures. Banks are now faced with competition from other lenders, and in response have been cutting some fixed and variable investor rates in a bid to win back market share.

The second half of 2018 will provide greater insight into what some suggest will be an inevitable cash rate hike, but for now, things remain stable. Those looking to purchase property, take time to speak to your broker about how lending restrictions could affect your position, and dedicate time to researching your loan structure – look well beyond your pre-approval. Be sure to factor in realistic predictions of your monthly outgoings, and ensure you have adequate capacity to repay your loan if rates do soar.

If buying or selling in the Bayside area is part of your property strategy for the second half of 2018, speak to Chisholm & Gamon about how we can assist with your plans.


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