Just In: RBA to Hold Interest Rates at 0.10%
There has been significant growth in the Australian housing market due to COVID-19 and record low interest rates.
As such, there has been much speculation around interest rate increases which seems to have cooled mortgage demand. However, the Reserve Bank of Australia recently announced what the interest rate will be.
What happened at the latest board meeting?
At its board meeting on the 1st of March, 2022 the RBA has confirmed that the official cash rate will remain at 0.10%.
In the RBA’s media release, Governor Phillip Lowe stated that:
“The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. While inflation has picked up, it is too early to conclude that it is sustainably within the target range."
How does the RBA interest rate affect you?
A majority of lenders, including those offering home loans take the RBA cash rate into consideration when setting their interest rates. Therefore, the RBA increasing or decreasing the cash rate could potentially impact how much or how little interest you pay on your debts.
What impact will this have on the housing market?
Moses Samaha, Executive General Manager at Equifax believes that house prices could start to fall in six to nine months, based on prior analysis between mortgage volumes and home values. In January 2022, mortgage demand fell slightly by 3% compared to the same time last year.
This is the second consecutive downturn in year-on-year growth since the early periods of COVID.
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