RBA keeps rates on hold at August meeting

RBA keeps rates on hold at August meeting
RBA keeps rates on hold at August meeting

The Reserve Bank of Australia (RBA) has kept the official cash rate at 2.0% for August.

CoreLogic RP Data head of research Tim Lawless said rather than lifting interest rates in an effort to slow down the pace of appreciation in Sydney and Melbourne home values, the RBA will be looking towards recent prudential supervisory activities by APRA to dampen investment demand.

"We are expecting investor demand will start to moderate as investment loans are both more difficult and costly to obtain," Mr Lawless said

"Additionally, the cumulative effect of low rental yields, worsening affordability, record levels of new dwelling construction and the maturity of the growth cycle are likely to act as a disincentive to any further acceleration in investment demand across Sydney and Melbourne, despite the steady interest rate environment.

"With dwelling values continuing their stellar run of growth through July, the housing market was likely to be a key topic of conversation for the Reserve Bank when they deliberated the cash rate today. Australian regulators, including the RBA and APRA, were probably hoping to see value growth in the housing market decelerating during the winter months, however the opposite has been true in Sydney and Melbourne."

Michael Crawford

Michael Crawford

Michael is the real estate reporter for western Sydney and loves writing about homes and the people who live in them. A former production editor and news journalist, he enjoys writing about real-world property purchases as well as aspirational buys and builds. Following a recent move from Sydney’s northern beaches, Michael now actually enjoys commuting.

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Interest Rates Reserve Bank

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