buy property interest rate cut

Published on May 5th, 2015 | by Chris Snell - Rental Success


Reserve Bank Australia Interest Rates Down

At the Reserve Bank Board’s May 2015 meeting, it cut official interest rates by 0.25% to 2.0%.

View the Macquarie Bank Interest Rate Report.

In this report the Macquarie Bank has reported that “This is the second rate cut this year, with February’s cut already taking rates to a historical low level.

Australian economy growing below trend

Despite no movement in March and April, the minutes from these meetings highlighted the Australian economy is growing below trend and would continue to operate with spare capacity. There had also been indications business investment could remain subdued for longer than had previously been expected.

Business confidence has not yet improved

Business confidence, as measured by conditions and expectations, has not yet improved.

The Australian dollar

The RBA commented again that the Australian currency was above fundamental value. Macquarie has downgraded its view and forecasts the Australian dollar to be at 67 US cents by the year end.

Further rate cut forecasted

Macquarie’s economists now believe that there will be one more rate cut, most likely in August, taking the official cash rate to 1.75%. This is based on the RBA’s own growth outlook and the combination of weak commodity prices, the soft employment market, muted consumer spending and the need for a lower currency.

We also believe that, before taking further policy action, the RBA is waiting for building activity to accelerate which will add supply to the buoyant housing market, helping to cool it a little.

The next RBA board meeting will be held on Tuesday 2 June.”

to view other posts similar to this Macquarie Bank Report – Visit their website 

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About the Author

Chris Snell is a licensed real estate agent and started his property career in 1992. Chris has experience in real estate sales and rental property management services. Chris has developed an excellent professional knowledge of all matters associated with rental property management and tenancy related issues. Chris manages a top tier property management company and aspires to educate property investors and landlords on the important aspects of rental success.

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