Ph: (02) 9370 56 64

Steady as she goes, says the RBA

On Apr 08 2015
Tagged as:
  • News
  • Commercial
  • Residential


Many economists and financial commentators have spent the past weeks predicting an Easter gift from ...

Many economists and financial commentators have spent the past weeks predicting an Easter gift from the Reserve Bank of Australia (RBA) in the form of a cash rate cut. David McDonald, chief investment strategist at Credit Suisse Australia told The Australian in a March 19 article there was likely to be a cut soon, noting that conditions were making it easier for the RBA to make this reduction.

However, in the April 7 statement from RBA Governor Glenn Stevens, it was revealed that the cash rate is to remain stable at 2.25 per cent, citing several factors for the decision. 

Shifts in the lending balance

In previous months, the RBA had noted that lending for people buying investment property was pushing forward at a rapid rate, but this has steadied somewhat according to the new statement. Glenn Stevens, RBA governor, said that overall credit growth was moderate, and owner-occupiers were not borrowing money for homes at a greatly accelerated rate either.

Where there was growth in recent times was the commercial arena.

"Lending to businesses, on the other hand, has been strengthening recently... [P]rices for equities and commercial property have risen, in part as a result of declining long-term interest rates."

This means positivity in a wide range of real estate markets, which offers a number of opportunities for anyone looking to buy or invest. 

Residential still positive

Even though growth appears to favour commercial real estate at the moment, there are still numerous options for those who want to buy residential property in Australia. In his comments discussing the cash rate decision, Tim Lawless of RP Data reminded readers that interest rates are currently at their lowest point since 1968. 

And with a glimpse of cuts on the horizon, investment gains could go gangbuster in the later months of 2015. 

"With mortgage rates potentially moving even lower later this year, it stands to reason that home values will continue to move higher to new historic highs," Mr Lawless said in the April 7 release. He also described the current housing market conditions as buoyant, and likely to boost growth all throughout the economy.

Whether your intention is to buy a property for owner-occupation or to make a commercial investment, the conditions continue to be ideal for making a purchase. It remains to be seen if May will bring the predicted cash rate cut from the RBA. 

Subscribe to our newsletter

Please enter your name
Please enter your valid Email Address
Please checked I Agree to Terms & Conditions and Privacy Policy
Please verify that you are not a robot.