Reserve Bank stays on pause at October cash rate meeting
Stalling property prices have seen the Reserve Bank leave the official cash rate on hold once again.
A cooling property market has seen the Reserve Bank again leave the official cash rate untouched at 1.50%. It now seems increasingly unlikely that the RBA will move on the cash rate in 2017.
The result was widely expected. All the experts surveyed in the finder.com.au Reserve Bank Survey predicted that the cash rate would be left on hold in October. Survey participant Michael Yardney of Metropole Property Strategists told finder.com.au the RBA was likely to see few indicators to prompt a rate rise.
“Australia's economy is still operating below its potential with economic growth not strong enough to justify an interest rate increase. The positive improvements of falling unemployment and rises in full-time employment are offset by slow growth in household income,” Yardney said.
The Reserve Bank was also likely encouraged by the cooling property market. New CoreLogic figures show price growth slowing, with Sydney’s home values falling over the month of September. REA chief economist Nerida Conisbee told finder.com.au the RBA would likely have taken the property market into account in making its decision.
“The economy is too weak to increase rates and the housing market is too sensitive to cuts to decrease them. It is likely the next move is up but it is unlikely to happen soon,” she said.