RBA decision highlights economy’s strength: Flavell

Mr Flavell said the RBA's decision was confirmation the Australian economy was “tracking along quite well”.

“Property prices across the combined capital cities continue to rise slightly month-on-month, unemployment remains relatively stable as does both consumer and business sentiment,” he said.

“With that said, it was all but certain that the Reserve Bank of Australia would choose to leave the official cash rate on hold.”

Mr Flavell said the cash rate was likely to stay on hold for some time.

“Indeed, all of the data points would strongly suggest there is no trigger for a rate cut or rate hike,” he said.

“And, while several economists were predicting a May rate cut at the beginning of the year, this now seems unlikely.”

However, CoreLogic RP Data head of research Tim Lawless has not ruled out a cash rate cut in 2016.

“With some of the heat coming out of the housing market and inflation remaining low, the Reserve Bank has room to cut the cash rate later this year if they see a requirement to do so,” Mr Lawless said.

“If we do see a lower cash rate later this year, chances are we won’t see the full rate cut passed on to mortgage rates due to the higher funding costs facing Australian lenders.

“Arguably, a cash rate cut wouldn’t have the same stimulatory effect on the housing market as what we saw from previous rate cuts in February and May last year.”

[Related: More rate hikes coming, says industry boss]