A number of high-profile industry figures say the Reserve Bank of Australia’s decision to leave the cash rate on hold at 2.0 per cent came as no surprise.
Mortgage Choice chief executive officer John Flavell says strong economic data, including stable employment and a bounce back in consumer sentiment, gave the RBA “no reason to change the official cash rate” at yesterday’s Board meeting.
“According to the Westpac-Melbourne Institute's Consumer Sentiment Index, confidence rose 4.2 per cent in February, taking the Index to 101.3. As a result, optimists now outweigh pessimists,” Mr Flavell said.
“In addition to the recent bounce back in consumer sentiment, data from the Australian Bureau of Statistics shows the unemployment rate continues to remain relatively stable.”
CoreLogic RP Data research director Tim Lawless agreed that the decision to keep rates on hold was expected.
“The hold decision from the RBA came as no surprise, considering labour markets are holding up and housing market conditions have moderated by remained firm,” Mr Lawless said.
“The fact that the rate of capital gains has wound down across the housing market and investor activity is reducing from the highs of mid last year are likely to be welcomed developments from the Reserve Bank.”
Meanwhile, REINSW resident John Cunningham said the RBA’s decision was a sensible one.
“The wait and see approach by the RBA is good for property consumers,” Mr Cunningham said.
“While the market has stabilised, we encourage those purchasing properties to consider a long-term outlook and factor in future interest rate rises.
“Record low interest rates will not last forever.”
The RBA’s decision yesterday marks the ninth consecutive meeting that the board has opted to leave the cash rate unchanged at 2.0 per cent.
[Related: Reserve Bank makes cash rate call]