RBA April 2016 meeting holds rates at 2 percent
The RBA cash rate decision came out at 2.30 today with the decision to hold yet again. The bank's last move saw it go to 2 percent at the May 2015 meeting.
The bank says there is scope to cut if inflation remains low. The dollar dropped after poor trade figures today.
CoreLogic RP Data head of research Tim Lawless said with annual growth in Australia’s capital city dwelling values falling to the slowest pace in 31 months by the end of March 2016, the RBA is likely to be focussing on other aspects of the economic landscape in their interest rate deliberations.
"The higher Australian dollar, commodity prices, low inflation and global uncertainty were likely the primary discussion points during the Reserve Bank’s meeting today," he said.
"With some of the heat coming out of the housing market and inflation remaining low, the Reserve Bank has room to cut the cash rate later this year if they see a requirement to do so.
"If we do see a lower cash rate later this year, chances are we won’t see the full rate cut passed on to mortgage rates due to the higher funding costs facing Australian lenders. Arguably, a cash rate cut wouldn’t have the same stimulatory effect on the housing market as what we saw from previous rate cuts in February and May last year."
LJ Hooker chief executive officer Grant Harrod, said today’s announcement to keep rates on hold was unsurprising even given the recent spike in the Australian dollar, however, he does not rule out a mid or late year reduction if needed.
“The East Coast is holding up and we are not seeing any significant change in Melbourne, Sydney and Brisbane where listings remain tight,’’ Mr Harrod said.
“Good properties in highly sought after areas are selling well above their reserve or anticipated price, even though there is some indication the number of buyers may be lessening.
“It is however a different story in Western Australia where the market is in favour of buyers with an array of properties for sale to choose.”