The RBA’s decision to leave the cash rate on hold – 1.75%, at the lowest they’ve ever been is no surprise. Many economists last month in an article here posted on Business Insider predict one more Rate cut to come in August. The main reasoning is the aim to help push inflation in our target band for the near future.

Press Release from the RBA here

I agree most with CBA’s Michael Blythe’s comments, “The domestic economy does not need additional support. GDP growth rates remain comfortably positive despite the headwinds from falling commodity prices and the end of the mining construction boom. Jobs growth rates remain comfortably positive and the unemployment rate is trending down. May’s Budget set to ramp up infrastructure spending, something RBA Governor Stevens has called for to take the some of the pressure off monetary policy.”

In terms of the Real Estate Market; the price growth within, we have seen less and less of a reliance on the Cash rate to market movement. A lot of this is to do with stricter lending policy that has been put in place over the last year or so. This lending policy has seen a segmentation of the market take place, between Apartments and Housing, due to the consumer demanding a higher quality of stock and not receiving it in many cases there is even a segmentation within those two segments.

With all the negativity released by the press, it hasn’t stopped prices rising yet again for houses – including in Sydney. Prices will always be driven by demand/supply and currently there is a high demand for quality stock. Plenty of buyers are waiting and wanting a property right now, so the foreseeable future looks good to me…