The Reserve Bank of Australia's board announced on Tuesday that the cash rate will remain at two per cent. This rate has gone unchanged for the fourth month in a row and will stay in effect until the board meets next month to examine the rate once again.
This percentage has been a record low for Australia for nearly 50 years. The decision to keep the cash rate at two per cent was widely expected as economists predict that the Reserve Bank will not change the rate at least until the end of the year.
The statement from Reserve Bank Governor Glenn Stevens cites several reasons for this decision. He says that available information indicates a moderate expansion in Australia's economy, though overall growth has been below long-term averages. Stevens concludes that "in such circumstances, monetary policy needs to be accommodative" to support borrowing and spending.
What does this mean for Belconnen property?
This can be interpreted as good news whether you're selling or buying real estate in Belconnen. The cash rate set by the Reserve Bank every month is the interest rate that it charges on overnight loans to commercial banks.
In turn, this usually affects the interest rate that banks set on their loans. A cut in the cash rate typically leads to a drop in interest rates on loans, with the opposite also being true.
This means that if you're selling your home, the number of potential buyers in the market should remain high as the cost of getting a home loan will remain low in the meantime.
Property hunters will find the two per cent cash rate heralding good news for them, as it means that the cost of borrowing to buy a house should stay relatively low.
If you find yourself a little lost, get connected with the friendly team at Ray White Belconnen for all your house-hunting and selling needs.