At its Board meeting earlier today, the Reserve Bank announced it would take a ‘wait and see’ approach to rates.
The decision means the cash rate will be left on hold at 1.5% for another month.
Speaking about the decision, Mortgage Choice chief executive officer John Flavell said he wasn’t surprised by the Board’s verdict.
“The Australian economy has been tracking along quite nicely of late. Business sentiment remains relatively robust, as does consumer confidence and the property market,” he said.
“As a result, there has been no need for the Reserve Bank to re-think their current stance on monetary policy.”
Mr Flavell said data from CoreLogic shows property prices continue to rise across most markets.
“While the level of property price growth has started to slow in recent months, it continues to track upwards year on year, reflecting the ongoing strength of the property market,” he said.
“Data from the Australian Bureau of Statistics also shows home loan demand remains at historical highs, with more than $30 billion worth of home loans approved over the month of July.
Mr Flavell said the Reserve Bank would be keen to see how this year’s rate cuts play out in the market before making any further adjustments to the current monetary policy setting.
“Of course, while the Board has made the decision to leave the cash rate untouched this month, future rate cuts this calendar year cannot be ruled out,” he said.
“Depending on what happens both domestically and internationally, we could see the Reserve Bank cut the cash rate at least once more this year.”
Regardless of what happens over the next few months, Mr Flavell said it was important for buyers and owners to remember that interest rates continue to sit at historical lows.
“If you have been thinking about buying, now could be the perfect time to do so,” he said.
“The cost of borrowing has never been more affordable, which is great news for home buyers and property investors alike. Alternatively, if you already own property and have been in the same home loan for a while, now is the best time to review your current situation and make sure you are still in the right product for your needs.”
Mr Flavell said borrowers may find there is a better and cheaper product on the market that could help them to save thousands of dollars over the life of their loan.