Cash Rate – No change
The Reserve Bank of Australia (RBA) has just announced it will maintain the official cash rate at 1.50%. This is the 10th consecutive month the RBA has made no change to the cash rate.
The Australian economy continues to be mixed with marginal trending upside. The RBA’s inflation target band of 2 to 3 per cent is not under pressure at this time but the likely “down the track” move in the cash rate should be an increase though weak wage growth continues to weigh down core inflation. There is expected to be a lift in the CPI result for the March-June quarter due to Cyclone Debbie and flow on effect of increasing prices of food.
Over the 12 months to May, building approvals were down 19.7 per cent. The decline was far higher than market expectations of a 1.3 per cent fall in May and a 14.1 per cent decline over the previous year.
Increases in interest rates for investors and interest only are helping to remove some of the impetus in the residential property market; rate hikes are very much APRA (Regulator) driven with banks moving out of cycle to the RBA cash rate.
Looking ahead there are some key announcements that will have some influence in coming months including CPI for the March – June quarter announced 26/7.
For more information, or if you would like a free review of your residential, commercial or SMSF loans against other competitive products in the market please contact Peter, David or Simon via this email, our phone: (03) 9882 2500, or visit www.firstpointgroup.com.au