Rates on hold for foreseeable future as real estate agents move online
Today the RBA met and decided to hold the official cash rate at 0.25%. This follows the move to drop the rate at an emergency meeting just a few weeks ago. The Reserve Bank has been working hard to shield the economy from the increasing impact of Coronavirus. Keeping the rates at this historic low is part of that. The other part is its quantitative easing policy. So far, the RBA has bought $36 billion worth of Australian government bonds on the secondary market, This is keeping the interest rates low on any deficits the government has following the recent stimulus measures.
In a world of uncertainty, one thing is clear. Interest rates will remain low, if not lower, for the foreseeable future. Today, Governor Lowe stated that the cash rate wouldn’t increase until targets for inflation and employment were close to being achieved. Whether the official rate will drop to an almost unthinkable 0% is probably unlikely. The impact of a rate cut reduces the closer it gets to 0. It’s more effective for the RBA to focus on quantitative easing measures instead. The government recent and frequent stimulus measures, including the JobKeeper and JobSeeker payments, will hopefully help cushion the impact on the economy of Coronavirus.
How big an impact Coronavirus will have on the housing market is still unclear. Melbourne agents are trying their best to adapt with online viewing and viewings by appointment but obviously auctions have taken a significant hit. Most lenders are offering flexible options to customers who are experiencing financial difficulties. If you’re worried about your repayments, contact your bank as soon as you can to discuss your options. Contact us as well and we’ll be happy to help.