Cash rate retained in June

Want-to-buy-a-house-It-could-be-a-good-time-to-do-so-_157_6013790_0_14093222_300Following on from its groundbreaking decision to cut the official cash rate in May, the Reserve Bank of Australia (RBA) has stood firm on its choice and retained the historic low rate of 2 per cent for another month. However, for those interested in buying a house, RBA Governor Glenn Stevens had some interesting insights into which direction rates could go in the months ahead.

In a June 2 announcement, Mr Stevens concluded that conditions that accommodated last month’s trim are still present, meaning the bank could keep the cash rate rate consistent. However, he also highlighted that it will continue to monitor the financial and economic climate over the coming months, and judge whether it is appropriate to make another change – be it up or down.

Compared to previous comments, this is a change of pace. While the bank has kept the chance of another trim alive, the opening is not as clear as it has been in the past – meaning it could be a good time to take advantage of current low interest rates to buy a slice of real estate.

This was a point echoed by Real Estate Institute of New South Wales President Malcolm Gunning, who noted that low interest rates should bolster homebuyers efforts to buy a home, particularly for investment. In fact, the REINSW pointed out that the official cash rate has plummeted 275 basis points since 2011, creating ideal conditions for taking the first step – or another step – on the property ladder.

“Despite record high property prices, now is a great time to invest in the property market because these highs are being complemented by record low interest rates,” Mr Gunning said in a June 2 statement.

“People should not be afraid of the current conditions and those who are already on the property ladder can use this opportunity to upsize or downsize.”

With interest rates sitting at an all time low, it could be a great time to get in touch with your local real estate agent about making the leap to home ownership.

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