Latest NewsReserve Bank Decision ImminentTuesday, 04 October 2016

Leading up to the Reserve Bank’s board meeting on Tuesday Oct 6th , there has been a great deal of data that the RBA board will be contemplating when deciding whether to lift interest rates or not. Residential property values recorded their largest monthly gain (1.9% nationally over August) since the RP Data-Rismark Home Value Index was released back in January 2005. Retail sales rose 0.9% in August (more than expected) and personal credit levels rose 0.5% in August. At the same time some of the latest statements from the Reserve Bank have cast concern over the under supply of housing across Australia and the impact that rising home prices will have on affordability.

It seems safe to say that if we don’t see a rate rise on October 6th, we will almost certainly see the cash rate lifted in November and maybe December as well. The impact on the property market is not likely to be significant. Most mortgage holders should have planned for interest rates to rise from their current ‘emergency lows’ and it is likely mortgage rates will return to normal levels of between 7-8% over the coming 12 months.

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