RBA Reveals August Cash Rate
The Reserve Bank of Australia has today announced the official cash rate for August following its monthly board meeting.
The RBA has held the cash rate at a record low of 1.5 per cent, a move predicted by most industry pundits amid mixed economic conditions.
Economist at AMP Capital Shane Oliver observed: “Growth has picked up a bit and the RBA is optimistic, but inflation and wages remain too low, property prices are falling in Sydney and Melbourne, the housing construction cycle has peaked and uncertainty remains around the outlook for consumer spending. So, it’s way too early to hike, but it’s hard to mount a case for a cut either right now. So, best to remain on hold.”
CoreLogic’s head of research, Tim Lawless, commented: “While the cash rate has remained stable, mortgage rates have been tweaked, the extent to which depends on the borrower type and loan product. Over the same period of cash rate stability, the average standard variable mortgage rate has actually reduced by 5 basis points for owner-occupiers and increased by 30 basis points for investors. Three-year fixed rates for investors have increased by 10 basis points and discounted variable rates are up by 40 basis points for investment loans.
“Additional mortgage rate premiums are payable for borrowers who aren’t paying down their principal. Clearly, the stability in the cash rate hides a deepening complexity in mortgage products brought about by the heightened level of regulation and focus from both lenders and policymakers on improving credit quality.”