RATE HOLD REINFORCES POSITIVE PROSPECTS FOR RESIDENTIAL PROPERTY MARKET
Century 21 Australia, the largest real estate company in the Asia Pacific region, believes that the Reserve Bank of Australia’s decision to hold the official interest rate at 3.5 per cent will provide an important degree of stability for the residential property market in a time marked by economic transition and uncertainty.
“In a decision that should provide some stability for property owners, the Reserve Bank has put the official cash rate on hold – a move that we expect will bring some certainty to the domestic market,” said Chairman of Century 21 Australasia, Charles Tarbey.
At its July meeting in Sydney today, the RBA elected to hold the official interest rate at 3.5 per cent, citing strong GDP growth, on-target inflation and improved domestic labour market conditions as key determinates in the decision. Despite maintaining the official interest rate, many analysts have predicted the RBA to make at least one further rate cut during the remainder of the year.
The decision follows back-to-back rate cuts in May and June, which resulted in the big four banks considerably lowering their interest rates. Such reductions functioned, in combination with changes to homebuyer concessions, to stimulate market activity in many areas and push national home values upwards over of the month of June.
RP Data Rismark released figures recently showing that capital city home values rose one per cent over June – the largest monthly increase the Home Value Index has seen in more than two years.