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One more month of a 2 per cent cash rate

By Kevin Kelly

Can you think of what you were doing back in May? It seems like a different life now. Autumn was transforming into winter and you were probably getting ready to bundle up, while Mad Max was wowing theatre goers across the country. 

That also happens to be the last time Australia's official cash rate (OCR) was changed, as the Reserve Bank of Australia (RBA) decided yesterday that it would hold the rate at 2 per cent for yet another month. This is the fifth consecutive month the record low rate has been kept steady, and will be heartening to anyone thinking of purchasing real estate in Bunbury and surrounding areas.

RBA governor Glenn Stevens explained that low interest rates were underpinning borrowing and spending, while regulations were helping to contain any market risks. For this reason, he and the RBA board saw fit to leave the rate where it was for another month. 

The news did not come as a surprise for many in the industry. 

"Low rates are here to stay for some time to come, with economic growth below trend, very subdued price inflation and the downside risks surrounding activity in China," said Housing Industry Association economist Shane Garrett. 

He went on to explain that low interest rates have been critical to maintaining strong levels of residential construction, which have been helping prop up the Australian economy. 

"This has been one of the factors behind the plateauing of unemployment since the start of 2015," he said. 

Low interest rates have been key to keeping housing affordability high during the current market cycle, so the news that they are staying put for some time is good for any buyers out there. Real estate in Bunbury South, Eaton and nearby neighbourhoods has never looked so appealing. 

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