This month, the Reserve Bank of Australia met for its first meeting for the year and elected to keep the official cash rate on hold at 1.5 per cent.
The official cash rate has been at an all-time low for some time now and forecasters are undecided about where the RBA will take it next. It seems likely that the RBA will wait to see if our economy continues to improve and for global economic developments before making any further changes, which could mean the official cash rate stays on hold for quite some time.
Meanwhile, lenders have adopted the policy of adjusting their interest rates outside of RBA movements in order to factor in local conditions and their actual costs. For example, since December there have been minor adjustments to some owner-occupier variable interest rate products and some lenders have increased rates slightly on some of their fixed rate loan options. So far, these adjustments have only been minor, but do get in touch if you need us to check your rate.
Auction activity has been surprising for this time of year, when property buyers are usually more interested in going to the beach than open house inspections. For the week ending February 5, Victoria had 321 auctions with a clearance rate of 75%, NSW 427 auctions with a clearance rate of 74%, QLD 294 auctions with a clearance rate of 46%, SA 156 auctions and a clearance rate of 62%, WA 54 auctions with a clearance rate of 21%, NT 4 auctions with a clearance rate of 100%, ACT 69 auctions with a clearance rate of 75% and there were 11 auctions in Tasmania with a clearance rate just under 50%.
Home owners and property investors will be pleased to note that the trend for rising home values looks set to continue into 2017. For the month ending January 31 most markets showed an increase and although these were mostly less than 1%, the fact they rose during the quietest time of year bodes well. Hobart was the exception, showing an increase for the month of 1.44%. The only market that showed a decline was Darwin, where home values fell by 1.72%.
A recent news article* revealed that a significant proportion of Australians do not know how much interest they are paying on their home loan! If you need an update or would like us to check your interest rate and home loan features to see if it is still the most suitable product for you, then please give us a call.
We’re excited about the year ahead, so if you’re considering purchasing a property this year, expanding your investment portfolio, or refinancing to a different loan product, just get in touch. We’ll be happy to help you get on the path to success.
We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. *Information Sources: www.realestate.com.au/news & www.realestate.com.au/auction-results & www.corelogic.com.au/research/monthly-indices.html