The Reserve Bank has kept official interest rates at 1.5 per cent for the 18th consecutive time, and that’s a record.
Most economists expected rates to stay put in April, including Canstar group executive Steve Mickenbecker who spoke to Property Observer.
“The Reserve Bank will want to see inflation, in particular wages growth, before it increases rates,” he said.
Mr Mickenbecker said it was questionable whether the RBA’s decision really mattered anyway.
“The big banks have brought out low promotional offers on their base products,” he said.
“They usually don’t deliver rate reductions for existing borrowers and they are often not even available to existing customers.”
“Borrowers now have a huge choice of loans that have an interest rate starting with a three,” he told Property Observer.
According to CoreLogic head of research Tim Lawless, the RBA would probably appreciate it if the property market continued to soften its rate of decline.
“Housing market conditions are likely to be moving further down the RBA’s list of priorities, considering the market is showing every sign of moving through a soft landing, with the pace of value decline easing over recent months,” he told Property Observer.
“The controlled slowdown in the housing market sector is likely to be a welcome outcome from the RBA, who are more likely to be focusing on labour markets, where the rate of unemployment, although lower than a year ago, crept higher in February.”
“With some slack in labour markets, wages growth remains close to record lows, which is keeping a lid on inflation and household consumption.”
Mr Lawless said it would be some time before the Reserve Bank finally does lift rates again.
“While the RBA has flagged the next move in interest rates will be a rise, it remains likely that any hike to the cash rate is well in the future.”