Investors facing higher rates, as the RBA holds at August 2017 meeting - a full year without any movement up or down

Investors facing higher rates, as the RBA holds at August 2017 meeting - a full year without any movement up or down
Investors facing higher rates, as the RBA holds at August 2017 meeting - a full year without any movement up or down

The RBA held at the August 2017 meeting.

The central bank last moved on rates in August 2016, when it cut rates to 1.5 percent. Rates have stayed at the record low of 1.5 percent since.

Investors in residential property are facing higher interest rates, said the RBA.

It said there has also been some tightening of credit conditions following recent supervisory measures to address the risks associated with high and rising levels of household indebtedness.

It warned that growth in housing debt has been outpacing the slow growth in household incomes.

"Conditions in the housing market vary considerably around the country. Housing prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease," the RBA Governor Philip Lowe said in a statement.

"In some other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases remain low in most cities." 

REINSW President John Cunningham said the decision sees interest rates remain steady for the past 12 months after the RBA last cut interest rates in August 2016. 

“While the RBA has not acted over the last year, there has been considerable activity from the banks," he said.

“The Sydney property market has settled down after a whirlwind period of growth but solid competition remains and will continue into the normally strong spring market. 

“Buyers must prepare themselves for several interest rate rises in the future, but the outlook remains positive,” Mr Cunningham said. 

The RBA will next meet on September 5. 

Even though the RBA held rates, but the bottom of the market has already passed for fixed rate mortgages, according to RateCity.com.au.

RateCity research showed that fixed rates across the board bottomed out in November of last year.

RateCity money editor Sally Tindall said funding cost pressures and increased government regulation had taken their toll on the fixed rate market.

 

 

 

 

Tags: 
Rba Rate Decision

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