The Reserve Bank of Australia (RBA) board maintained the cash rate at its record low of 0.1 per cent on Tuesday, in line with its prior stance that it would not raise rates until inflation targets are met and wage growth picks up – which is not expected until 2024.
The last rate movement took place in November, when the RBA slashed it from 0.25 per cent and commenced broad quantitative easing.
The Reserve Bank has not been swayed into increasing the official cash rate to take heat out of the property market today, as speculation mounts the market could boom even more once vaccination targets are met and the country reopens.
Australians have been promised that fully-vaccinated citizens and permanent residents will be able to travel overseas from November, once states and territories reach the government’s 70% to 80% COVID-19 vaccination target.
More than 1,000 Australians were surveyed last week seeking their views on the property market sentiment. We found 35% of people surveyed expected the property market to heat up even further once restrictions are lifted, whereas just 22% expected it to cool, leaving 43% undecided.
This comes shortly following the latest CoreLogic data, which revealed the average dwelling price surged by more than 20% in the past year, and 1.5% in the past month alone.
Despite the potential for further price hikes and Treasurer Josh Frydenberg indicating a crackdown on new loans to come, many prospective buyers remain undeterred.
With property markets booming, we have continued to see competitive new lows in interest rates as lenders chase their share of borrowers, and two larger banks even reduced their interest-only lending rates in recent weeks.
Despite the stagnation of interest rates, lenders are still hungry for business with the continuation of interest rate reductions and refinance cashback schemes.
Rates are at a record low and lenders continue to offer very competitive rates.
We can answer your questions and look at your circumstances to make sure you're prepared for what could be coming next. This could mean refinancing or approaching your lender for a better rate. Because we do this type of work every day, we have a pretty good idea what lenders can do to win or keep your business.
We're here to help if you have any questions. Please don't hesitate to give us a call.