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The Reserve Bank of Australia’s decision to hold the cash rate steady for another month has come as no surprise to the property market.
The cash rate remains at 3 per cent as RBA governor Glenn Stevens notes that the “downside risks appear to have lessened over recent months."
Stevens says the RBA remains ready to cut rates if needs, providing inflation remains in check.
The announcement is not unexpected for Gold Coast real estate executive Andrew Bell (pictured), who says that further interest rate cuts are looking less likely.
“Any future interest rate cuts will be determined by how the economy is responding to the current rate, but there is a growing belief that we may well be at the bottom of the interest rate cycle,” says Bell, the CEO of Ray White Surfers Paradise Group.
Bell says the record low interest rate environment has bolstered the local property market and will continue to do so as consumers feel the effects of the RBA’s cuts totalling 1.75 per cent between November 2011 and December last year.
“Interest rates are the most predominant driver of the real estate market at present and I’m confident the current interest rate climate has been a determining factor in the improved market sentiment we’ve seen of late.
“People generally don’t go out and spend as soon as interest rates drop. They wait about six months to see how much stimulation they’ve actually provided.
“The rate cuts of the last 14 months are being felt by the market at present.”
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