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ISCOVER
Staff Reporter
The Reserve Bank of Australia has left the official cash rate on hold for the ninth consecutive month.
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According to a statement by RBA governor Glenn Stevens, the Board said it was prudent to maintain the current setting of monetary policy, "particularly in view of the acute sense of uncertainty in global financial markets over recent weeks".
The Board’s decision to leave the cash rate on hold at 4.75 per cent failed to surprise industry pundits, as low consumer confidence continues to hurt activity in the property sector.
But while many mortgage holders will ultimately breathe a sigh of relief, RP Data’s national research director Tim Lawless told The Adviser that the decision to leave rates on hold would fail to improve overall buyer confidence.
“Australians have become very interest rate sensitive, a fact that can be seen in the low number of transactions across the housing market and weak growth in retail spending. At a time when inflation has risen outside of the RBA’s comfort zone we also have a situation where consumers simply aren’t spending and are lacking confidence. The stability in interest rates over the past nine months would have been welcomed by many mortgage holders, however speculation about future rate lifts is likely to continue to dampen market conditions anyway,” he said.
