House market continues to strengthen as RBA holds rates at 0.1%
As expected, nothing really happened at today’s RBA meeting. The rate was held at 0.1% and the bank reiterated its generally positive outlook on our economy.
Although many millions of Victorians are again enduring another lockdown because of delays in building suitable quarantine facilities and in getting us all vaccinated, the economic outlook is not too bad. The RBA noted that the economic recovery was happening faster than expected and the uncertainty caused by COVID outbreaks would diminish as vaccination rates increased.
In fact, the elephant in the room that is starting to make a little bit more noise, is house prices. The property market has gone from strength to strength in the last year. Last month, the RBA mentioned that they were keeping an eye on house prices. This month they again emphasised that they were watching prices “carefully”.
The RBA is stuck between a rock and a hard place. They don’t want to raise the interest rate (which would dampen house prices) because they fear it would have an impact on the employment rate.
The low cost of borrowing, the increase in value and the low rental vacancy rates make the property market appealing to first-home buyers and investors alike. And today with the RBA reconfirming that the official cash rate is unlikely to rise before 2024 at the earliest, the housing market will remain an attractive investment option.
Those with good credit and a good deposit can get an attractive deal with many lenders. We can review your options to make sure you get the best deal for you whether you are looking to buy your first home, upsize or downsize or add to your property portfolio. Contact us for a home loan health check today.