RBA cash rate decision for March
The Reserve Bank has announced its cash rate decision for March, as the upcoming federal election gets closer and real estate in Australia readies itself for change, particularly in the event of a party change over.
As widely anticipated, the RBA has left the official cash rate on hold at 1.5 per cent.
Australia’s top economists and market commentators were united in predicting another hold. The level of buyer interest has increased however not enough to increase interest rates.
Head of corporate affairs at Mortgage Choice, Jacqueline Dearle, correctly predicted the RBA’s hold this month, and added that it is likely to do so until it gets a better handle on what’s really happening locally with consumers. She also said that right now there are no major external drivers to shift.
“In February, the Fed left the key interest rate unchanged and said it would be patient in the face of a mounting set of risks, including slowing growth in China and Europe, Brexit, ongoing trade negotiations and the effects of the five-week U.S. government shutdown. Back in Australia, the RBA’s prediction of 3 per cent economic growth this year and 2.75 per cent growth next year may be too optimistic.”
But Ms Dearle did say that softer growth numbers in our economy mean higher unemployment, which would suggest a rate cut down the track.
“The RBA will be keeping a keen eye on the housing market, especially the key markets of Sydney and Melbourne. With the housing adjustment threatening to spill over into the wider economy, the negative wealth effect may increase consumer desire to save and curb consumer spending, which in turn impacts retail and the wider economy.”
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