Welcome to the end of 2013!!
Well, for the last time month of the year, after a big year of a dropping market, the Reserve Bank has decided to keep interest rates on hold. No surprises there! So we are still hanging around at that 60 year low of 2.5%
- Current rates are steady, but signals remain mixed
- Unemployment holding with the dollar easing
- More signs of moderating housing market activity
Here's what Domain.com had to say:
Interest rates have fallen by 2.25 percent since the current easing cycle began in November 2011. Although the Bank is currently engaging in a wait-and-see approach on the effect of its stimulatory monetary policy on economic activity, recent results have nonetheless remained mixed.
The national trend unemployment rate rose from 5.7 percent to 5.8 percent over October with no indication of a sustained improvement emerging. Sydney's unemployment rate at 5.6 percent remains a full percent higher than that recorded over October last year with Melbourne similarly at 6 percent a full percent higher than at the same time last year.
Building approvals continue to rise with another solid lift over October. However most of the increase in activity has been through a surge in apartment approvals in Sydney and Melbourne rather than a significant increase in house approvals.
The performance of local economies remains problematic and with continued concerns over the sustainability of a stubbornly subdued US economic recovery, the economic outlook remains uncertain. The dollar however has fallen over recent weeks and if it continues to weaken may act to stay the hand of the Reserve Bank on further rates cuts.
The prospect of rapid prices growth in local housing markets fuelled by low rates is diminishing with the Sydney market now alone in reporting strong buyer activity. Buyer activity in other markets remains largely flat or is diminishing from the growth levels recorded earlier in the year.
So our thoughts...
- Sit back and relax, the market is going to stay steady for at least a couple months
- Lock in those low interest rates now while you can!
- Have a Wonderful New Year! Expect there to not be much viewing or buying, and that the race will slow down a little while many take their annual leave. Research and prepare for mid January when things get back to normal.
Thanks for being great!
- The Wise Loan team.