Rates on Hold

The Reserve Bank of Australia has announced the outcome of its February board meeting.

The RBA has today opted to keep the official cash rate on hold at 2.5 per cent.

This decision was widely anticipated, with RP Data senior research analyst Tim Lawless labelling the rate hold “clear cut”.

“The inflation reading for December was unexpectedly high and the lower Aussie dollar is now coming into play. Housing prices are also still rising – evident by another good January – and that will cause rates not to fall for the rest of 2014,” he said.

Mr Lawless added he didn’t expect rates to rise until at least the second half of the year given the varied performance of capital city housing markets.

While Sydney and Melbourne property markets continue to power ahead, the rest of the capitals are a bit of a mixed bag, he told Real Estate Business.

“Brisbane is starting to show a real decent trend now, although nowhere near where Sydney and Melbourne are; Perth and Darwin are now being affected by the mining transition, and Adelaide and Hobart are a little softer,” he said.

The cash rate has now remained steady at 2.5 per cent since August.

Source: http://www.rebonline.com.au