Consumers optimistic as RBA leaves cash rate on hold at 2.5%

australia-interest-rateIt seems the RBA’s rate-cutting cycle has officially come to an end, with the RBA opting to leave the official cash rate on hold for the fourth consecutive month.

At its Board meeting earlier today, the RBA erred on the side of caution and left the cash rate on hold at 2.5% after new data found consumer confidence is rising.

Local Mortgage Choice franchise managers Jason Coviello and Daniel Eigenmann believe the renewed surge in consumer sentiment was buoyed by the strength of the Australian economy.

The latest Westpac Melbourne Institute Index of Consumer Sentiment increased by 1.9% in November. According to the Index, this result can be attributed to a number of economic factors including a stable unemployment rate and sound house price growth.

According to research by RP Data, house prices rose by 1.9% over the September quarter. This subtle growth in dwelling values is encouraging consumers to be more optimistic about the state of the economy.

Positive results recorded by the Westpac Melbourne Institute Index of Consumer Sentiment found the majority of Australians are now confident about the state of the economy.

More than 55% of Australians believe the economy will remain strong throughout 2014. This is no doubt a result of the recent spate of positive economic data.

The unemployment rate is sitting at just 5.7%, the Consumer Price Index continues to outperform expectations and the total value of dwelling finance commitments jumped 5.3% in September.

With all of this positive data spilling out of the Australian economy, it was largely unsurprising to see the Reserve Bank leave the cash rate untouched this month.

The RBA’s decision to leave the cash rate untouched means interest rates continue to hover around record lows.

If you are interested in discussing your home loan options, given the current state of the market, feel free to contact Jason or Daniel at any time on;

Ph: (08) 9220 5200



DANIEL EIGENMANN. Daniel is the franchise manager for Mortgage Choice in Perth and the Western Suburbs area. Daniel is an Authorised Credit Representative of Mortgage Choice Ltd (CRN# 446566).