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The Reserve Bank of Australia (RBA) is being urged to keep the cash rate at 2.5 per cent after new data was released earlier this week.
The Real Estate Institute of New South Wales (REINSW) said the RBA should maintain the current cash rate after the September 2014 quarter CPI (consumer price index) figures, released on Wednesday, showed inflation continues to be within the central bank’s target range.
REIA president Peter Bushby said this should translate into good news for homeowners.
“In the September quarter, the CPI rose by 0.5 per cent and an annual inflation rate of 2.3 per cent. These figures are still well within the RBA’s target zone of two to three per cent and should not put real pressure on the inflation outlook,” he said.
The ‘housing’ group within the index increased by 0.5 per cent for the September quarter compared to 0.8 per cent in the June 2014 quarter. The main increases in the September quarter for the housing group was for property rates and charges, which increased by 6.3 per cent. Rents also increased by 0.5 per cent for the quarter and 2.3 per cent for the year.
Mr Bushby said the figures indicate there is currently no need to change the cash rate.
“With inflation under control combined with indications in some markets that housing is tempering, it’s appropriate that the RBA Board maintains interest rates at their present level,” he said.
The RBA's next board meeting and cash rate announcement is on Tuesday November 4.