Melbourne Cup day rate hold was always a safe bet
Posted on Tuesday, November 05 2013 at 2:52 PM
While the Melbourne Cup captivated millions of Australians, the RBA Board held its monthly meeting and reaffirmed its stance that interest rates should hold steady.
RP Data research director Tim Lawless says
the move came as no surprise and, from a housing market perspective, the
current rate setting is sufficient.
“(It’s) clearly having the intended effect
of encouraging more buyers into the housing market, stimulating new housing
construction,” Lawless says.
Home sale transaction numbers are about 20
per cent higher than they were this time last year, while dwelling values
across the combined capital cities have risen by 7.9 per cent in the past 12
months, he says.
“The RBA has on several occasions now
stated that they’re comfortable with the level of capital gains in the housing
market.
“In fact, the current rate of growth is
well below the highs achieved over previous growth cycles and dwelling values
(in) every capital city apart from Sydney remain below their previous peaks.”
Recent inflation, unemployment and economic
growth data also likely contributed to the decision to leave the cash rate on
hold.
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