RBA leaves rates at 2% but experts say there’s more cuts on the way

Property Investor

The Reserve bank has kept interest rates at their record low of 2 per cent this month, but experts say there are more cuts coming later this year. 

RBA governor Glenn Stevens cited the impact of weak capital expenditure this week in his statement.

“A key drag on private demand is weakness in business capital expenditure in both the mining and non-mining sectors and this is likely to persist over the coming year,” the statement said. 

Domain Group senior economist Andrew Wilson said the RBA will probably cut rates twice before the end of the year off the back of these bleak capital expenditure figures. 

“If we don’t get an improvement they can’t justify not cutting again,” he told The Age. 

Shane Oliver from AMP Capital thinks we may even see a cut as early as next month. 

Adding his thoughts was LJ Hooker CEO Grant Harrod who told The Age he also expects a rate cut before the end of the year and says it will be good news for property markets outside of the heated Sydney and Melbourne markets. 

“It is too early to call if [last month’s cut] had any positive effect in cities such as Perth and Canberra – it could take another three to six months,” he said. 

The rate announcement this month could help to stabilise the Sydney and Melbourne property markets which have been running hot. 

Rob Elsom from Hocking Stuart told The Age auction clearing rates were too high to necessitate another rate cut this month. 

“When the auction clearance rates are so high there’s no reason to cut the cash rate to stimulate the market, so it’s no surprise interest rates were held today,” he said.


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