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C&G’s Guide to the September RBA Announcement
There is no Spring change on the horizon for the Reserve Bank of Australia, who have announced the national cash rate will remain at 1.5% for September. A widely anticipated announcement, in today’s C&G blog we provide further insight into what this continued stasis means for the property investors and aspiring home-owners.
The result of the RBA’s monthly board meeting this afternoon came as a surprise to few industry pundits and the wider public: for the thirteenth consecutive month, the RBA have kept interest rates on hold at 1.5%.
What does this mean for Australia’s housing market? As explained by Governor Philip Lowe, conditions in the housing market continue to differ considerably across Australian states – with the cost of housing in some areas growing exponentially, and in others, falling. According to Governor Lowe, property values in capital cities on the eastern seaboard are continuing to increase – although easing conditions are likely in Sydney. This easing in capital growth may be further hastened by an influx of apartment housing stock coming onto the market – and whilst residential construction remains at high levels, little additional growth is anticipated. Landlords won’t be surprised to learn that rent increases nationally remain low in most cities – the payoff being higher capital growth in blue-chip property belts.
Other factors have also influenced the RBA’s decision to keep the cash rate on hold – such as slow growth in wages and high levels of household debt. This period of low wage growth is unlikely to abate in the near term, despite employment growth being on the up nationally. Additionally, inflation is expected to pick up gradually as the economy continues to strengthen.
For both vendors and buyers, Melbourne’s bayside real estate market continues to offer wonderful results and purchasing opportunities. With a growing population, terrific schools, transport options, public amenities and our famous beaches – Melbourne’s bayside community continues to be highly sought after real estate. Chisholm and Gamon’s recent experiences at weekend auctions confirms that if you’re looking to buy or sell, September remains an optimum time.