As the spring selling season takes off, the Reserve Bank of Australia (RBA) has today opted to keep interest rates on hold at 1%.
The official cash rate has now remained unchanged for two months, but it won’t last according to realestate.com.au chief economist Nerida Conisbee.
At its meeting today, the Board decided to leave the cash rate unchanged at 1.00 per cent – https://t.co/aueUmpLaqa
— RBA (@RBAInfo) September 3, 2019
“The RBA kept rates on hold today, but further cuts are on the horizon. The Australian economy is still showing signs of weakness, however inflation increased marginally over the June quarter (0.6%) and unemployment remained steady in June.
The main threat to the Australian economy continues to come from uncertainty in global markets and the trade war between the US and China.
“While economic conditions looked a bit more stable this month, there is still a lot to be concerned about. Retail trade is dismal, wage rises are still weak and the US-China trade war is yet to be resolved. Trump announced more tariffs on Chinese goods. While the federal government is able to give Australians tax cuts and the RBA can reduce interest rates, control over economic instability at a global level is much more difficult,” she says.
What’s next for borrowers?
Today’s decision hasn’t surprised realestate.com.au visitors with 30% surveyed in August predicting that the RBA would keep interest rates on hold.
Of the 1,222 realestate.com.au visitors surveyed, 27% think major lenders will still raise their rates, regardless of the RBA’s monthly decision.
And a further 29% think that property prices are set to rise, which is pleasing to sellers as the spring season is just about to begin.
For borrowers not much changes following today’s decision with monthly repayments unlikely to change now.
But most experts are tipping another rate cut from the RBA by the year’s end and most think it will come in November.
For borrowers and buyers, this means now is the time to get all your paperwork ready and shop around for a better deal.
Introductory offers from most major lenders can often be more competitive, so there’s never been a better time to refinance in an effort to lower your mortgage repayments.