Falling dollar means RBA likely to hold rates steady

by Julia Corderoy27 Jan 2015
The softening Australian Dollar and moderating property price growth will likely leave the cash rate on hold until the Reserve Bank of Australia’s second quarter meetings, according major real estate network LJ Hooker.

LJ Hooker CEO Grant Harrod says the RBA will leave the cash rate on hold at 2.5% to help underpin construction employment away from the mining sector and to stimulate the construction of new housing.

“Price growth has been moderating and will continue to do so, but transaction volumes are still very strong,’’ he said.

“December was LJ Hooker’s best month on record for unconditional sales, showing the market is still very responsive to the low interest rate levels.

“The RBA is watching the markets return to sustainable levels and employment figures at the end of December were better than expected.

“It’s most likely the cash rate will remain at its current level during the first quarter.”

Despite many predicting the cash rate will drop next month, LJ Hooker’s national research manager Mathew Tiller says keeping the cash rate stable is expected to see demand for property remain elevated, as buyers continue to take advantage of the cheap mortgages on offer. However, it shouldn’t see the resumption of steady price growth like it would if rates were dropped.


  • by OLEGIRL 27/01/2015 3:04:37 PM

    Falling fuel price and US Dollar should help Coal Mines.