Homeowners and buyers in Sydney pleased by inflation rate

The-inflation-rate-is-within-target-which-spells-good-news-for-Sydney-buyers_157_67534_0_14092665_300Low interest rates have been a trend in Australia for some time, which has enabled investors and homeowners to use their existing equity and obtain affordable finance in order to expand their portfolio or upgrade their existing home.

Reserve Bank of Australia (RBA) Governor Glenn Stevens announced that the central bank intends to keep the cash rate at 2.5 per cent for some time, in an April 1 statement.

Mr Stevens also noted that a target rate of inflation was 2 to 3 per cent, anticipating that actual inflation will be “consistent” with this figure over the next two years.

Inflation within target

Newly released data from the Australian Bureau of Statistics (ABS) highlights that this target rate has been met. The Consumer Price Index Index (CPI) rose 0.6 per cent quarter-on-quarter to March.

On a year-on-year basis, the CPI was 2.9 per cent in seasonally adjusted terms, lead by significant price rises for the tobacco, automotive fuel, secondary education and tertiary education sectors.

The yearly increase to March 2014 (2.9 per cent) was slightly higher than the year-on-year inflation rate to the December quarter (2.7 per cent), but still falls within the RBA’s target.

“These figures auger well for continued recovery in Australia’s residential building industry,” noted Shane Garrett, HIA senior economist.

Careful management of the cash rate to keep inflation rates within target are creating favourable conditions for home buyers in Sydney and elsewhere across Australia.

“The bottom line is that interest rates are likely to remain at very low levels for some time to come,” stated Mr Garrett

“This is good news both for existing homeowners and for those considering¬†purchasing their home.”

With a range of dwelling types available across Sydney, buying may be feasible for a range of buyers who have obtained adequate finance.

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