RBA rate announcement
The Reserve Bank of Australia has announced the outcome of its February board meeting.
>The RBA has today opted to keep the official cash rate on hold at 2.5 per cent.
This decision was widely anticipated, with RP Data senior research analyst Tim Lawless labelling the rate hold “clear cut”.
“The inflation reading for December was unexpectedly high and the lower Aussie dollar is now coming into play. Housing prices are also still rising – evident by another good January – and that will cause rates not to fall for the rest of 2014,” he said.
Mr Lawless added he didn’t expect rates to rise until at least the second half of the year, given the varied performance of capital city housing markets.
While Sydney and Melbourne property markets continue to power ahead, the rest of the capitals are a bit of a mixed bag, he told Real Estate Business
“Brisbane is starting to show a real decent trend now, although nowhere near where Sydney and Melbourne are; Perth and Darwin are now being affected by the mining transition, and Adelaide and Hobart are a little softer,” he said.
Deputy chairman of LJ Hooker L Janusz Hooker said strong house price growth across Australia’s east coast has given the Reserve Bank little incentive to move rates this month.
"January unconditional sales across the LJ Hooker national network are up by 21 per cent on last year and buyer enquiry is showing no sign of slowing down,’’ Mr Hooker said.
"Property is buoyant and it is now spreading to regional areas on the east coast, but there are still some slow markets such as Tasmania.
"While the Aussie dollar is down it is too early to hike rates, but maybe later in the year,’’ Mr Hooker said.
According to Mr Hooker, both local and international economies will dictate when the next rate increase will be.
The cash rate has now remained steady at 2.5 per cent since August.
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