The Reserve Bank of Australia (RBA) announced that it would be keeping the cash rate at 2.5 per cent. This means that the record low will remain unchanged for the fifteenth month, which is good news for Hawthorne real estate owners.
Glenn Stevens of the RBA stated that dwelling prices should continue to rise and the global economy should continue to grow at a steady rate. This is good news for homeowners, especially those who seek to get more value out of their investment.
This is not to say that there are only positives for homeowners. Prospective buyers also benefit from the period of stability as Mr Stevens expects inflation to stay between 2 and 3 per cent. He explained that with such accommodating financial conditions, long-term interest rates and risk spread remain low. This is beneficial for buyers as they will face lower added costs for repaying any loan.
RP Data Research Director, Tim Lawless was in favour of this result as he noted that the "RBA is more concerned about the level of investment in housing rather than the pace of capital gains". He continued to say that raising interest rates would be detrimental to the economy, suggesting that maintaining the low rate would allow for more stability.