The Reserve Bank of Australia (RBA
) has chosen to hold the official cash rate steady at 1.5% for the third consecutive month.
This decision was widely anticipated by economists and brokers with the vast majority of pundits predicting no change.
A survey of HashChing’s broker network found that only 93% of brokers said rates would stay on hold in November. A finder.com.au
poll found 30 out of 33 economists predicted the rate would remain steady while Bloomberg
found 22 out of 28 economists said the same.
Amid some of the riskier gambits occurring at today’s Melbourne Cup, Tim Lawless
, research director at CoreLogic
, said that keeping the rate steady was a safe bet by the Reserve Bank.
“The performance of the housing market was likely a key topic of discussion amongst RBA
board members, with CoreLogic
’s October results released today showing a further 0.5% rise in dwelling values across the capital cities.”
Since the first rate cut in May, Lawless said that CoreLogic
’s hedonic index – which includes property attributes such as the number of bedrooms or geographic location – increased by 4% across Australia’s capitals with significant rises in Sydney and Melbourne.
With the cash rate on hold, mortgage rates are likely to remain at the lowest levels since the mid 1960s, he added.
“It’s becoming more broadly accepted that such low mortgage rates have contributed to a renewed strengthening in housing market conditions despite lower transactional activity and rising affordability constraints, and policy makers would be reluctant to offer more stimulus to the already hot housing market performance.”