The RBA has held the cash rate at 1.5% today despite growing expectations of a rate cut this year.
Housing affordability has improved substantially since Budget 2018, but could last night’s Budget have done more?
Although the RBA has left the cash rate unchanged since August 2016, there is a growing likelihood that the cash rate will move lower later this year.
The RBA left the cash rate on hold at 1.5% at its March meeting today. but there is a growing possibility that rates could fall later this year.
The RBA has looked past the housing downturn which has gathered some momentum over the past three months, to hold the cash rate firm at their first meeting this year.
The longest period of interest rate stability on record has extended out another month, with the RBA keeping the cash rate on hold at 1.5% where it has remained since they cut the cash rate by 25 basis points in May and August of 2016.
Mortgage rates to investors are up as much as 50 basis points over the same time frame but the RBA has held the cash rate at 1.5% for a record 27th month.
Despite the housing downturn gathering some pace in September, we don’t expect the RBA to throw a lifeline to the housing market in the form of lower interest rates.
The RBA has kept rates on hold, with financial markets betting the cash rate won’t move until at least January 2020.
The RBA’s decision to keep the cash rate on hold marks the two year anniversary of the last change; the longest period of interest rate stability on record.