Effect of rate hold will be ‘benign’: Monique Sasson Wakelin
The decision by the RBA to leave rates on hold today will have a “benign” effect on the property market, according to Monique Sasson Wakelin, managing director of Wakelin Property Advisory.
Her response is in strong contrast to the gloomy reaction from others in the property and mortgage industries.
Wakelin says the decision to keep rates unchanged sends a “positive message about the health of the Australian economy”.
“The RBA is satisfied that the economy is robust by world standards and not requiring additional stimulation. The evidence of this is low and stable unemployment, inflation sitting comfortably within its desired range of 2% to 3% and the economy growing close to trend.
“It is also clear that the RBA does not wish to stimulate a disproportionate increase in house prices, demand and finance that could ultimately lead to undesirable inflationary pressure and a yo-yo effect on prices and demand in the property sector,” she says.
In keeping rates on hold at 4.25% Sasson Wakelin says the RBA has been “prudent in balancing up international and domestic conditions”.
“With a stable domestic economy and conditions abroad that are at least not getting worse, the RBA has adopted a wait and see approach.”
“This stance provides the Reserve Bank more firepower to cut rates further should the eurozone debt crisis deteriorate or the nascent
“On balance, we welcome the decision and believe the short- and medium-term impact of the announcement are benign,” she says.