October 7, 2014 - Rates on hold until mid-2015: experts
Domain | by Toby Johnstone, Deputy Domain Editor (News)
The Reserve Bank has again flagged growing investor activity and done nothing.
The Reserve Bank has made no secret that it is watching house prices closely but it is becoming clear to economists that the board will not use the cash rate to cool things down this year.
On Tuesday the RBA left the official cash rate on hold at 2.5 per cent for the 14th consecutive month.
Australia is now experiencing the longest period of interest rate stability in more than a decade, and it looks set to continue.
All 28 experts surveyed by mortgage comparison website finder.com.au are now expecting the cash rate to start rising next year, most probably in June. Six months ago almost half of the respondents (five out of 11) expected the cash rate to start rising this year.
The senior economist for the Domain Group, Dr Andrew Wilson, said the RBA was unlikely to move rates while key economic data remained “mixed”.
But Dr Wilson did note that despite rates staying on hold, finance was becoming cheaper.
“Mortgage rate settings, however, remain competitive with major banks continuing to improve housing loan affordability through lower lending costs,” he said.