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The Reserve Bank of Australia (RBA) has announced the outcome of its monthly board meeting.
At 2:30pm today the RBA revealed it will leave the official cash rate on hold at 2.5 per cent. March will mark the sixth consecutive meeting where the board has kept rates steady at 2.5 per cent, with the last rate drop occurring in August 2013 and no meeting occuring in January 2014.
Tim Lawless, RP Data national research director, said the RBA board would likely be looking at the positive signs in the national property market, which have a multiplier effect on the rest of the economy.
“More housing market activity has translated to greater developer confidence and a consistent upwards trend in new building approvals,” he said.
“RP Data’s February results showed flat capital city dwelling values that will probably reassure policy makers such as the RBA that the unsustainably high rate of capital gain that has been evident since June last year may be winding down.”
Mr Lawless said that as long as mortgage rates remain low, housing market conditions should stay in “positive growth territory”.
Today’s announcement was in line with economists’ predictions earlier this week. Shane Oliver, head of investment strategy and chief economist at AMP, said recently that a “period of stability in interest rates is appropriate”.
A finder.com.au survey from earlier this week reached the same conclusion, with 10 of Australia's leading economists unanimously predicting that rates would remain steady today.