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The Reserve Bank of Australia has announced the outcome of its third board meeting of the year.
In line with a majority of expert predictions, the RBA has today announced that it will leave the cash rate on hold at 2.25 per cent.
The announcement will surprise few, with a finder.com.au survey of 42 economists and commentators finding that over 75 per cent of them believed rates would remain steady today.
LJ Hooker CEO, Grant Harrod, who predicted the cash rate would remain at 2.25 per cent today, said Sydney’s thriving property market would have been at the forefront of the RBA board members’ minds as they made the decision.
“Auction clearance levels in Sydney remain near record levels and more often than not reaching prices higher than market expectations,” he said.
“We are continuing to see large numbers at open inspections and agents are receiving multiple offers, so the demand is still there and fuelled by already low rates.”
Mr Harrod said he wouldn’t rule out further rate cuts, but believes the RBA has time on its side to reflect on the impact of the February rate cut.
LJ Hooker national research manager Matthew Tiller said the property market had an interesting few months ahead – speculating that winter would produce an active market, leaving the RBA further room to move if need be.
Mr Tiller said the winter market in Sydney would be particularly busy, as smart homeowners look to capitalise on the ongoing demand.
“With the east coast housing market continuing to show strength, the RBA today didn’t add any extra fuel to the fire.
“Concerns about unemployment seem to be easing and this is also good news for homebuyers and investors because it is giving them added confidence and security.”
Mr Tiller said future cuts to interest rates depend on inflation statistics and balance of trade figures, due out in coming weeks.
“We would be very surprised if they didn’t cut soon, possibly May. The market is now pricing in two further cuts to 1.75 per cent by December 2015.”