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The Reserve Bank’s decision to leave the cash rate unchanged has been welcomed by brokers and there are now hopes that the bottom of the downturn may be near.
According to many in the sector, the RBA’s call to leave the cash rate on hold at 3.25 per cent – the first time rates have remained unchanged since the RBA commenced cutting rates in September last year – is a strong vote of confidence for the Australian economy.
David Johnston, director of Property Planning Australia, is optimistic about Australia’s outlook.
“Certainly some people may have liked to see another reduction... but overall it’s a really positive statement from the RBA about the health of the economy.”
Sean Richardson, of Freshwater Financial Services, echoed similar sentiments to Mr Johnston.
“Obviously another reduction would be very nice, but how much would even be passed on by the banks we don’t know," he told Mortgage Business.
Since September the RBA has reduced the cash rate by a hefty 4 per cent and the government has pledged more than $50 billion in stimulus initiatives.
Mark Andersen, director of More Home Loans, said the central bank’s hold on the cash rate would allow time to judge the effects of these extensive macroeconomic measures.
“This pause will give the economy time to stabilise and time for the Reserve Bank to see just how current policy measures are playing out.”
The RBA’s pause on rates was also seen as a strong indication that the rate cycle is close to bottoming out – and the ideal time to fix home loan rates could be very near.
“It shows we’re getting extremely close to the bottom of the market and the time to look at fixed rates,” Mr Richardson said.
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