Who is mad about the cash rate?
As the Australian dollar declines, many economists and would-be fortune tellers have been predicting a cash rate cut from the Reserve Bank of Australia (RBA) would arise this week. In a Jacob Greber piece published by the Australian Financial Review from March 31, it was noted that a cut this week could also be followed by another in a few months, taking the cash rate below 2 per cent.
But of course, predictions can run awry - or at least be a little premature. The RBA decided on April 7 to keep the cash rate stable at 2.25 per cent, citing moderate growth in both local credit and the global economy. It has raised some vocal reactions from big names in the property industry - so who said what, and is it really going to impact your Australian property purchase?
The Real Estate Institute of New South Wales, for one, is pleased with the outcome. In a statement released shortly after the cash rate announcement, President Malcolm Gunning said it was too soon to do another cut, referencing the reduction made by the RBA in February.
"These unique conditions should be approached with caution and we cannot stress enough the importance of carefully reviewing your financial situation before committing to a mortgage," Mr Gunning noted in the statement.
However, not everyone was as pleased with the 'steady as she goes' approach adopted by the RBA.
Less than impressed
One organisation that wants to see a further growth spurt in Australian property is the Housing Industry Association. In its response to the RBA decision, Chief Economist Harley Dale says general demand is in a negative spot, and that another cash rate cut would give the market the shot in the arm it needs.
"The Reserve Bank has clearly signalled it intends to undertake a further interest rate cut, so it should just get on and do it," he said, clearly not in the mood to mince words.
But how is that supposed to make you feel? The mixed messages can be confusing, but remember that every organisation has its own goals - what's truly important is what you want out of the market. While I think value can absolutely be taken from statements like the above, the true value lies in finding the right Sydney investment property for your particular situation.
So don't be swayed too much by strong statements one way or the other - contact your local buyers' agent and tell them what you want, and we will make it happen.