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The prospect of further cuts to the official cash rate has been quashed, says the Housing Industry Association, following the RBA’s announcement on Tuesday.
HIA chief economist Harley Dale says the association expects there will be no more reductions to the official cash rate in 2017.
“The decision to keep the cash rate steady at 1.50 per cent in February signals that economic conditions would need to deteriorate markedly from where they currently sit if there were to be a further interest rate cut,” Mr Dale said.
He said the RBA appears “slightly more bullish” on the world economy and “a little more sanguine” regarding risks to the domestic economy.
“Notably, the RBA recognises the wide diversity in housing market conditions around the country. The RBA is relying on supervisory measures to constrain any areas of the home-lending market where they might have concern.”
Mr Dale said this is an appropriate approach in the current diverse housing environment.
“And hopefully [it] should dampen presumptuous calls from some quarters for a rate hike in 2017,” he said.
The RBA, in a decision that was widely anticipated, kept the official cash rate on hold at a record low of 1.50 per cent.
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