Interest Rate

15/03/2017

Australian housing markets ‘defy belief’ but bank warns against knee-jerk policy reactions

The Sydney and Melbourne housing markets are continuing to “defy belief” but banks have warned that government measures designed to address affordability could actually drive up prices. National Australia Bank chief economist Alan Oster said property prices were showing no signs of slowing, despite growing concerns about affordability two months out from the federal budget. The analysis from NAB shows median dwelling prices have climbed up to nine times higher than gross household incomes in Sydney and seven times higher […]
15/03/2017

How would rising interest rates affect property prices?

If interest rates start to increase, do you expect any change in property prices in the short to medium term? Any increase in interest rates would mean mortgage repayments would rise, putting pressure on household budgets; also, people buying properties would find it harder to qualify for a loan. These factors combined would put downward pressure on property but, of course, the effect on an individual property would depend on its location and price range. The pressure would be less […]
14/03/2017

Rate rises in the US won’t force Reserve Bank of Australia’s hand

INTEREST rate rises will be on the minds of many in the world of finance this week, but Australian home buyers should be safe, for now. Economists and analysts believe the US central bank is almost certain to increase its official interest rate when it meets midweek, possibly the first of four rate rises for the world’s largest economy. However, Australia’s Reserve Bank — which left its official rate unchanged at 1.5 per cent last week — is widely expected […]
08/03/2017

RBA leaves cash rate on hold in March

THE Reserve Bank has left the official cash rate on hold at 1.5 per cent for the sixth meeting in a row. The RBA was widely expected to keep rates steady at its March meeting after the national accounts released last week showed a marked turnaround in economic growth. Reserve Bank governor Philip Lowe last month spoke three times about keeping rates on hold to balance the need to boost inflation while maintaining financial stability amid record household debt. Real […]
08/03/2017

Why the RBA cares about house prices and how it affects interest rates

The majority of countries in the world have a central bank whose role is to maintain economic stability by managing the currency and interest rates, and issuing bank notes. In Australia, this institution is known as the Reserve Bank of Australia, also referred to as the RBA or the Reserve Bank. On the first Tuesday of every month, except for January, the RBA board meets to determine whether it should change the official cash rate. The result usually makes headlines […]