Unchanged cash rate aims to further stimulate Australian property sector

By the resi financial blog team, 02 July 2014

Interest rates in Australia July 2014

Australia's official cash rate has been retained for another month, which could offer a great opportunity for anyone sitting on the fence about committing to a home loan and pursuing their dream home in the near future. The Reserve Bank of Australia recently announced the board's decision to keep the official cash rate at the historically low level of 2.5 per cent, where it's been resting since August last year. 

RBA Governor Glenn Stevens said the overarching financial conditions across the nation remained accommodative, with firm exportation conditions helping keep the economy afloat. Furthermore, housing construction and investment has continued to grow - great news for future development of the industry. 

This decision was expected by many across the real estate sector. Housing Industry Association Senior Economist Shane Garrett said the stable interest rates have been fantastic for the growth of the nation, especially the recovering housing industry. 

"The record low interest rates we have had for the past twelve months has done much to fuel growth in the most interest rate sensitive sectors of the economy. We estimate that new dwelling starts grew by 10 per cent during 2013/14, hitting one of the highest annual totals on record. Low interest rates have also been instrumental in helping the ailing renovations market finally take a turn for the better," said Mr Garrett in a July 1 statement. 

Furthermore, Mr Garrett said the low interest rates were further stimulating housing construction, which could illustrate a great opportunity for potential investors across the region. Alleviating Australia's potential housing shortage - especially as the population is projected to explode - will be an essential part of maintaining the development of the nation. 

Categories: Home Loans, Property Investment