The cash rate has been left on hold at 2.75 per cent, in a decision made today by the Reserve Bank of Australia.
The rate hold was an expected result, according to Raine & Horne COO Brian Reid, who says the RBA is taking a ‘watch and wait’ approach as it continues to monitor the rollercoaster Australian dollar, commodity prices and the Chinese economy.
Tim Lawless, RP Data national research director, said the RBA is likely to be reasonably comfortable with the performance of the housing market, with dwelling values up three per cent over the first half of the year and increasing by 0.2 per cent over the June quarter.
“Another indicator that low mortgage rates are having the desired effect is that transaction numbers are rising, with national home sales almost 13 per cent higher over the three months ending April 2013 compared with the same period a year ago,” Mr Lawless says.
“This scenario of rising demand but contained value growth is likely to be exactly what the RBA are seeking from the national housing market. There has also been an improvement in the number of dwelling approvals with the April data showing a nine per cent lift over the month, and a 27 per cent lift over the year.”