At its monthly meeting today, the Reserve Bank has again confirmed the official cash rate will remain at 0.10%.
Concerns continue to be expressed that record low interest rates are fueling a housing boom, increasingly putting property ownership out of the reach of many prospective first home buyers and placing the wider economy at risk by creating a housing ‘bubble’.
The RBA remains very reluctant to increase rates, fearing that doing so will result in an increase in unemployment and a further reduction in wage growth which could be just as harmful to the economy.
The likely outcome is that the Australian Prudential Regulatory Authority (APRA) will look to cool the housing market by introducing so called macroprudential controls, aimed at restricting what it deems to be riskier borrowing for housing.
Rates are at a record low and lenders continue to offer very competitive rates. We will be providing updates of changes to fixed and variable interest rates over the month of October.
If you have any questions about this announcement or interest rates, please feel free to contact us.