More than one in every two home owners expect the RBA to leave the official cash rate unchanged for a fifth consecutive month, a national survey has found.
The poll, taken by mortgage broker Loan Market, asked ‘What action do you think the RBA is going to take at its March meeting?’ with 53% of respondents anticipating the current cash rate to be maintained at 3%.
Loan Market spokesperson, Paul Smith, says that even with the highest level of unemployment since November 2009 and the slowest rate of home loan growth in 36 years, there are positive factors in the economy that are giving home owners confidence.
“Despite a weaker than expected inflation rate, home owners still aren’t convinced the RBA will see the need to lower the cash rate.”
Smith says 39% of the 436 home owners surveyed predicted that the RBA will lower the official rate by 25 basis points on Tuesday.
“There have been some positive numbers coming out of the real estate industry – auction clearance rates are showing that those who want to purchase or sell have a heightened ability to do so. Interest rates are currently at historic lows and fixed interest rates continue to fall, which indicates some lenders are anticipating further rate cuts in the future. Home owners should make sure they’re taking advantage of these low rates so that they can offset any other rising expenses.”
Smith says the percentage of home owners predicting no rate cut dropped 4% from the same survey in April - the same result for the March survey.
“There’s clearly evidence that home owners are paying attention to the key factors that influence the RBA’s rate decision and can correctly predict the monthly rate decisions.”
Loan Market survey results:
What action do you think the RBA is going to take at its March meeting?
Lower rates 25 bps 39%
Lower rates 50 bps 6%
Raise rates 25 bps 2%
Leave rates unchanged 53%