The RBA has made its latest decision on interest rates as Treasurer Josh Frydenberg prepares to deliver his recovery budget next week.
The RBA has left rates on hold at their effective lower bound of 0.1 of a percentage point.
The decision comes ahead of one of the most important budgets in Australian history, with Treasurer Josh Frydenberg set to turn away from austerity and take advantage of the RBA’s record-low rates to fuel Australia’s economic recovery.
“[The] Treasury’s projections are that nominal economic growth will exceed the nominal interest rate for at least the next decade,” Mr Frydenberg said in a major pre-budget speech last week.
“That is, economic growth will more than cover the cost of servicing our debt interest payments. As a result, by growing our economy, we can maintain a steady and declining ratio of debt to GDP over the medium term as we continue to move towards balancing the budget.”
The latest rate decision comes in the wake of the release of data that shows national house prices have recently seen the steepest quarterly increase in almost 18 years.
The REIA president, Adrian Kelly, has recently publicly encouraged potential sellers to realise their plans to sell their property now.
“Demand is strong, with buyers hungry for housing, and it’s difficult to know long the good times will last,” Mr Kelly said.