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The Reserve Bank of Australia has made its cash rate decision following a month of intense speculation.
The outcome of the meeting was to leave rates at their current level of 2.00 per cent – a result predicted by all six of Smart Property Investment’s investment commentators.
Current market conditions and recent policy changes at home and abroad meant the RBA could not justify a shift in rates in either direction, according to the commentators.
Cate Bakos, of Cate Bakos property, explained that dwindling employment figures and the national housing outlook, meant that the RBA could not justify a move upwards.
“Whilst consumer confidence and retail spending is up, business investment (plant and equipment) is still down, employment has not increased, and house price growth has not increased,” she said.
Liz Sterzel, of Property Wizards, said that despite worries over economic conditions in China, not enough was yet known about the full impact of these changes.
“A cut in rates due to Australian stock market volatility, poor company profits and China’s economic and stock market trouble is doubtful, as the RBA is more likely to watch how these scenarios develop into the future,” she told Smart Property Investment ahead of today’s meeting.
Alan Fox, of Propertunity, stated that the changes to investor lending instigated by APRA will result in the RBA taking a step back from any immediate rate adjustments.
“APRA’s actions have already caused the big four banks and Macquarie to raise interest rates on investor loans, so APRA has done their job for them. They’ll be adopting a wait-and-see approach in my view.”