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C&G’s Guide to the June RBA Announcement
It was business as usual at the Reserve Bank of Australia this week, with the all-time-low national cash rate of 1.5% held for another month. As always, C&G are here to provide insights into what this means for the property market and economy.
“Another month, another unsurprising cash rate decision from the Reserve Bank of Australia”, seemed to be on the lips of many this week, as Governor Dr Philip Lowe met expectations and kept the national cash rate at an all-time-low rate of 1.5% for another month. Consistent with a lack of change in the wider economy since May’s board meeting, this rate stasis follows a run of 10 consecutive rate holds with opinion divided on whether the RBA’s next move will be up or down.
There appears to be a positive attitude towards recent growth and inflation – which, coupled with a slight cooling in the undersupplied property market, has made life a little brighter for the board. Continuing with their patent ‘watch-and-wait’ approach, the economy appears to be moving in a direction the RBA approves of.
With unemployment falling and the government finally starting to see some calm in the Sydney and Melbourne property markets, there is speculation that a rate cut could be on the cards. Until recently, this option was considered largely redundant due to fiery demand in the east coast’s housing sector. Previously, further rate cuts could have stimulated market demand, but lending restrictions dampening investment demand and mortgage rates slowly on the rise means a more stable property market across the board.
It’s tough to say what the future holds for the national cash rate, with strong arguments presented for both a rate cut and a rate hike in the coming months. As it stands, here in Bayside we’re still experiencing strong auction results. The new financial year will bring with it enhanced demand from first home buyers – newly freed from their stamp duty obligations – which will only continue to offer great results for C&G vendors who are selling to upsize. If you’re looking to buy or sell, the Chisholm & Gamon team remains on hand to assist with your property strategy.