An improvement in consumer sentiment, combined with a robust property market, has encouraged the Reserve Bank of Australia to leave the official cash rate on hold.
At its September Board meeting, the Reserve Bank said it made sense to take a ‘wait and see’ approach to rates this month.
“It is clear the Reserve Bank is keen to see how the August rate cut plays out in the marketplace before making any further adjustments to the current monetary policy setting,” Mortgage Choice chief executive officer John Flavell says.
“Ultimately, the latest economic data has provided the Reserve Bank with no reason to alter the cash rate. Data from the latest Westpac Melbourne Consumer Sentiment Index found confidence was up 2% to 101.0 throughout August.”
Data from National Australia Bank’s latest Business Survey shows business conditions and sentiment remain at elevated levels.
“Furthermore, the property market continues to go from strength to strength, with prices rising across most capital cities over the last 12 months,” Flavell says. “Moving forward, I would expect to see even more heat in the property market as buyers and sellers come out of their winter hibernation.
“The spring selling season is notoriously hot in Australia and I expect this one to be no different.”