As the property market continues to go from strength to strength, the Reserve bank of Australia (RBA) has revealed its cash rate decision for the month of March.
In an unsurprising move, the RBA has maintained the cash rate at its historically record-low of 0.1 of a percentage point, where it’s expected to remain for months — and even years — to come.
For Tim McKibbin, CEO of the Real Estate Institute of New South Wales (REINSW), the decision was an unsurprising one.
He said buyer access to affordable finance will continue to be a driver of price growth, with mortgage rates also at record lows thanks to the cash rate.
Last week, Mr McKibbin predicted that low rates will be likely to stay “for years to come, even though other signs point to the economy recovering faster than expected, including the encouraging employment figures released recently”.
An abundance of affordable finance and the positive employment outlook have led him to predict continued growth in the property market, with double-digit growth “not out of the question”.
It’s a similar sentiment to what was expressed just yesterday by NAB executive for home ownership Andy Kerr, who was reflecting on the release of CoreLogic and ABS data which revealed February had seen the fastest month-on-month price value growth since August 2003.
Mr Kerr said it showed “the housing market has quickly shrugged off the challenges of 2020 despite the ongoing COVID-19 impact.”
He, too, pointed to record-low interest rates and strong government support measures as having proven “the backbone” of the recent housing recovery.
“We expect the low rates to continue to support prices, particularly while there is strong job creation,” Mr Kerr said.
“Given this backdrop, we are forecasting house price growth of 10 per cent in capital cities this year. Apartment prices are also likely to rise, but at a slower pace, particularly in Sydney and Melbourne.”
As a result, Mr Kerr and NAB “anticipate house price growth will remain very strong into 2022, before normalising closer to income growth in 2023”.