Home News Interest rates still at 1.5%, despite falling home prices

Interest rates still at 1.5%, despite falling home prices

Font size :

The Reserve Bank of Australia disclosed on Tuesday that it is holding the interest rate at 1.50% while it keeps an eye on the country’s home market.

The Reserve Bank of Australia disclosed on Tuesday that it is holding the interest rate at 1.50% while it keeps an eye on the country’s home market.

In Governor Philip Lowe’s statement regarding the monetary policy decision, it was noted that conditions in the Sydney and Melbourne housing markets have continued to ease, and nationwide measures of rent inflation remain low.

Inflation is around 2% at present, but this is expected to climb in the next two years.

The bank also highlighted that the Australian economy continues to grow. In fact, the GDP rose by 3.4%. Now, it is projected to improve further to an average of a bit above 3% in 2018 and 2019.

Moreover, the labour market also showed positive results. The unemployment rate is tracking lower and is currently at 5.3% – marking the lowest level in almost six years.

Marcel Thieliant, Senior Economist for Australia at Capital Economics, commented on the rate decision in relation to home values. “We think that the full effects of tighter credit conditions and falling house prices have yet to be felt. That means the labor market will tighten only slowly and inflation won’t rise much. Our view is that the bank won’t raise interest rates until the second half of 2020.”

Bloomberg, meanwhile, reported that Lowe is wary about the household debt across the nation, which is now at 190.5%of income. “Potentially further weighing on households is an out-of-cycle mortgage-rate hike by three of the nation’s big-four banks. Consumption accounts for almost 60% of Australia’s gross domestic product so any risk to its outlook is significant,” the news portal stated.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

Mortgage News and Articles

McGowan government earmarks $421m to assist prospective homeowners McGowan government earmarks $421m to assist prospective homeowners

Premier Mark McGowan announces the extension of WA’s Keystart loan book Read more

Will the housing market nosedive to a hard landing? Will the housing market nosedive to a hard landing? A new report sheds light on the housing downturn’s possible impact on the economy ... Read more

Tight lending rules weigh down auction clearance rates Tight lending rules weigh down auction clearance rates An industry expert calls for an extension of auction campaigns ... Read more

Construction activity crumbles as housing downturn takes toll Construction activity crumbles as housing downturn takes toll New orders remained weak, indicating weak activity in the future ... Read more

More mortgage news and articles

Sponsored Links

Tuesday, Dec 11, 2018
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords