RBA holds cash rates at 0.1%
Today’s RBA monthly board meeting on monetary policy handed down its decision on cash rates, holding them at the historic low of 0.1% for a tenth consecutive month.
In today’s statement, the RBA noted the effect recent outbreaks of Covid have had on the economy, but remained confident the country could weather the storm as the housing sector continues to strengthen.
‘Recent outbreaks of the virus are interrupting the recovery and GDP is expected to decline in the September quarter,” the RBA said.
‘The experience to date has been that once virus outbreaks are contained, the economy bounces back quickly… and the vaccination program will also assist with the recovery.’
Unsurprisingly, current statistics underline the property market’s strong appeal to investors.
A CoreLogic report suggested that paying off a mortgage is now cheaper than paying rent on 36.2% of Australian properties. This is higher than the pre-pandemic levels of 33.9% in February 2020.
And in further good news for those considering an investment property mortgage, CoreLogic’s national rent index was up, rising 2.1% in the three months to June this year with a 6.6% increase over the most-recent financial year.
‘Housing markets have continued to strengthen, with prices rising in all major markets. Housing credit growth has picked up, with strong demand from owner-occupiers, including first-home buyers.
‘There has also been increased borrowing by investors. Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained,’ added the RBA.
This encouraging data follows statistics from the most-recent financial year showing a healthy 13.8% increase in the average value of homes across Australia.
House values rose 15.6% while unit prices enjoyed an uptick of 6.8%. So while property prices keep increasing, the returns for those planning to rent their property out are more than keeping pace. As ever, location is the key.
Are you in the market for your first or next mortgage? Are you looking at options to refinance your current home loan?
If so, contact our expert team. We can help guide you in finding a deal that best matches you and your circumstances.