status quo for the official cash rate
In a move that's shocked no-one, the Reserve Bank of Australia (RBA) has retained the official cash rate (OCR) at 2.5 per cent for another month.
The news is sure to please those securing finance for the purpose of buying and building new homes. Given that the OCR affects lenders' interest rates, the RBA's monthly announcements are closely watched by property industry experts and regular home buyers alike.
RBA Governor Glenn Stevens noted that economic growth has been "moderate", though it will be a while before "unemployment declines consistently". He also made comments in relation to the country's housing market.
"Dwelling prices have continued to rise over recent months," Mr Stevens stated on October 7.
Rising residential property values have been a hot topic as of late, though there is evidence of some softening in the market, according to research from RP Data. Such findings bode well for first-time buyers seeking affordable property options.
"Looking ahead, continued accommodative monetary policy should provide support to demand and help growth to strengthen over time. Inflation is expected to be consistent with the 2-3 per cent target over the next two years." Mr Stevens said.
Housing Industry Association Senior Economist Shane Garrett commented on the RBA's decision, noting that the retention of the record-low rate was "widely expected".
"The era of very low interest rates has provided a welcome boost to new home building, and is doing something to alleviate the shortage of dwelling accommodation suffered by Australia," Mr Garrett noted on October 7.
That said, Mr Garrett did emphasise the importance of a solid home building industry, noting that it needs to keep up with long-term demand. Residential land restrictions and stamp duty have impeded dwelling supply, according to Mr Garrett.
Builders in Perth will no doubt have plenty on their plates as more families look to secure homes on the back of affordable finance.