CoreLogic’s most recent market update shows the interest rates on mortgages to be at a 50-year low, and believe the recent RBA update will keep the rates steady for some time to come.
This comes after the Reserve Bank chose to hold the cash rate at 1.5% at its last board meeting.
Corelogic point out that the combination of an already record low rate coupled with a very boyant Sydney and Melbourne market make it difficult for the RBA to reduce rates. They claim that lowering rates would stimulate an already active market, which it no doubt would in our view.
CoreLogic research director Tim Lawless said that despite affordability concerns, the market is still very strong in both Sydney and Mebourne, and would deter policy makers from driving demand for property upwards through a decrease in the cash rate.