RBA holds again at July 2016 meeting
The RBA cash rate decision came out at 2.30 today with the decision to hold yet again.
Some 24 of 25 economists expect the cut at the August meeting.
CoreLogic head of research Tim Lawless said the RBA has looked through the fog of political uncertainty and global volatility to keep the cash rate on hold.
"From a housing market perspective there has recently been renewed heat in the Sydney and Melbourne markets where, according to the CoreLogic Home Value Index, the trend rate of growth has bounced higher over the past three months," he said.
"The reversal in what was previously a moderating trend in housing market conditions was likely to have been a concern to the RBA, however CoreLogic's June data showed a slower pace of capital gains compared with April and May which may indicate the recent surge in dwelling value appreciation will be sort lived.
The chances of interest rates moving lower in August remain high; June quarter inflation data will be available late this month, providing a timely read on consumer prices prior to the August RBA meeting. It is likely that the inflation figures will come in well below the RBA target range of 2-3 percent.
"If that is the case, there is a high likelihood that interest rates will move lower next month. The challenge for policy makers and regulators will be to ensure lower mortgage rates don’t refuel a higher rate of growth in the Sydney and Melbourne housing markets where affordability is already stretched and rental yields are pushing to new record lows each month."
LJ Hooker chief executive officer Grant Harrod said a cash rate cut could still come by the traditionally busy spring selling season if market conditions did not resume promptly.
“Sellers can be put off by elections and we’ve just come out of one of the longest campaigns held in Australia,” he said.
“During the recent campaign, listings across the board were down an average of 5 percent across the country compared to the same period last year.
“But history has shown listings rebound after a poll and the RBA, through holding the cash rate at the record low of 1.75 percent today, is waiting for this to happen.
“Buyer enquiry has remained strong throughout the election campaign while the average capital city auction rate hit as high as 72 percent over the period. There’s a strong opportunity for sellers to capitalise on that interest now and beat their competitors ahead of the traditional spring listing period.
"The RBA would still keep an eye on any property ramifications of the Brexit outcome.
“We don’t anticipate any impacts to filter through to the actual property market in the immediate future due to the time it takes to transact. But it may turn out that we benefit from the global conditions as investors seek out alternatives to London.”