Interest rates hit 53 year low

The Reserve Bank has cut the official cash rate by 25 basis points to 2.75 per cent amid signs of continuing softness in the economy.

The last time interest rates dipped this low was in 1959/1960 and the cut equates to a saving of around $60 a month in interest on the average $300,000 home loan.

The RBA judged a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target.

It believes the global economy is likely to record growth below trend this year, before picking up next year. The CPI rose by 2.5 per cent over the past year, and measures of underlying inflation gave a broadly similar outcome. These results have been pushed up a little by the impact of the carbon price. Growth of labour costs has moderated slightly over recent quarters while productivity growth appears to be improving.

Among the major regions, the United States continues on a path of moderate expansion and China's growth is running at a more sustainable, but still robust, pace. Japan has announced significant new policy initiatives aimed at strengthening demand and ending deflation. The euro area remains in recession and commodity prices have moderated a little in recent months.

The news has been welcome by the Housing Industry Association which reported house price growth in Australia’s capital cities stagnated in the first quarter of 2013.

Huge savings to celebrate Active Property team expansion

Canberra real estate agency Active Property is proud to welcome Adrian Murray and Anne Lynch to its successful sales team.

To celebrate their arrival Active Property is pleased to announce the introduction of a special $6990 fixed price commission to sell your property in the ACT, for a limited time.

This price includes all marketing, including professional photographs of your property and exposure on our website and allhomes.com.au, as well as GST.

Adrian Murray is Active Property’s registered salesperson for the North Canberra region. Fifteen years’ experience as a carpenter in the local building industry and  time spent managing properties for a prominent community housing organisation have provided the springboard into a career in real estate.

Anne Lynch is a registered salesperson with 30 years’ experience in the local finance and housing sector. Anne joins the team as Active Property’s open home specialist.

With the added benefit of having our sister companies, The Home Loan Centre and Conveyancing Canberra located in the same office, we have the ability to manage your entire real estate transaction, ensuring it’s as smooth as possible.

If you would like a realistic and honest appraisal of your property please contact us on

(02) 6214 8555.

Cash rate steady

It’s official – the Reserve Bank of Australia has kept the cash rate steady at three per cent at its monthly board meeting today.

The decision was widely expected by economists who now seem split over the possibility of a further cut this year. Some are even predicting the RBA could begin to lift interest rates as early as October.

The mixed signals follow signs monetary policy is gaining traction. Consumer sentiment and the housing market are improving in large part due to low interest rates, while locally real estate agents are reporting stronger levels of enquiry.

The TD Securities Melbourne Institute monthly inflation Gauge increased by just 0.2 per cent in March, following a flat monthly result in February.  In the 12 months to March the inflation gauge increased by 2.1 per cent, the lowest annual inflation outcome in eight months.

Contributing to the overall change in March were price rises for alcohol and tobacco (seasonal), and clothing and footwear. These were offset by falls in fruit and vegetables, household appliances, and audio, visual and computing equipment.

According to Annette Beacher, Head of Asia-Pacific Research at TD Securities, “We expect next month’s RBA Board meeting to be a benign event. We are of the view that the cash rate should remain at three per cent, with the Bank’s clear easing bias remaining on the table.”

The official RBA statement can be found at http://www.rba.gov.au/media-releases/2013/mr-13-06.html

Rates on hold as the banks make cuts to stimulate lending

The Reserve Bank of Australia surprised no one today by keeping the official cash rate on hold at three per cent.

It’s not all bad news for people trying to enter the housing market with increased competition amongst the banks driving lending rates down.

Over the past month, the Home Loan Centre has witnessed a reduction in variable lending rates while some institutions have cut their fixed rate to less than five per cent for between one to three years.

Home loan growth is the slowest in three decades with the December quarter showing just 0.3 per cent growth in the number of people taking out mortgages.

Insiders say it is this lack of growth that’s prompting banks to consider further chopping rates irrespective of the RBA’s latest decision.

Furthermore, the TD Securities – Melbourne Institute Monthly Inflation Gauge remained flat in February, following small rises in January and December.

In the 12 months to February, the Inflation Gauge increased by 2.4 per cent on the back of price rises for fruit and vegetables, automotive fuel and tobacco, though these were offset by falls in holiday travel and accommodation, clothing and footwear.

This tame level of inflation remains well within the RBA’s two to three per cent target range.

For the RBA’s official interest rates statement visit http://www.rba.gov.au/media-releases/2013/mr-13-04.html

Interest rates on hold despite signs of softening economy

The Reserve Bank has adopted a ‘wait and see approach‘, leaving interest rates on hold at its first board meeting of the year.

The decision to leave the official cash rate at three per cent takes into account weaker-than-expected building approvals for December, the continuing fall in job advertisements, while inflation remained subdued in January.

The TD Securities – Melbourne Institute Monthly Inflation Gauge rose by 0.3 per cent in January.

Contributing to the overall change were price rises for utilities, urban transport fares and education, mainly due to seasonal factors. These were offset by falls in holiday travel and accommodation, clothing and footwear, and furniture and furnishings.  While the price of fruit and vegetables only rose by 1.2 per cent last month.

Meantime, the strong Australian dollar has allowed numerous goods and services to be imported at discount prices, although this impact is likely to fade as the year unfolds and the Australian dollar stabilises.

The cash rate has been lowered by 125 basis points over the past 12 months. It’s thought more time is needed to measure the effect of this monetary easing, which will be more clear come the March meeting.

For the RBA’s full decision visit http://www.rba.gov.au/media-releases/2013/mr-13-01.html

RBA delivers Christmas cheer with rate cut

‘Tis the season to be jolly and today the Reserve Bank of Australia delivered an early Christmas present to mortgage holders – cutting interest rates by 0.25 per cent.

The decision to drop the official cash rate to 3 per cent – the lowest level since September 2009 – follows a deluge of data showing manufacturing activity and job advertisements continued their decline while October’s retail sales fell flat.

The latest Australian Bureau of Statistics Retail Trade figures show Australian retail turnover was relatively unchanged in October 2012, following a rise of 0.5 per cent in September 2012.

Meantime, ABS business indicators show company profits are down 13 per cent for the September quarter when compared to a year ago.

Assuming lenders follow the RBA’s lead, the cut equates to a monthly $47 reduction in repayments based on a $300,000 loan amount over a 25-year loan term at the standard variable rate of 6.6 per cent.

For the official RBA statement, please visit http://www.rba.gov.au/media-releases/2012/mr-12-36.html

Three-year fixed rate at 5.39% with no rate lock

We're told we live in uncertain times, in the mortgage broking and finance industry, and people are reluctant to spend. Remember the saying “Cash is King”…

Well, why not consider holding on to more of your cash and getting the certainty back in your life? The Home Loan Centre can currently offer a three-year fixed rate at 5.39% with a free rate lock on application.

This rate is with one of The Home Loan Centre's major lenders and, according to senior mortgage broker Michael Searle, is one of the lowest fixed rates on offer.

"Instead of trying to predict where interest rates are headed, why not lock in peace of mind for the next three years and put some valuable cash back in your pocket," said Mr Searle.

"An increasing number of our clients are taking steps to refinance their existing home loan and have been surprised at just how much they can save."

Call The Home Loan Centre for a free health check on your mortgage.

For more details visit HomeACT.com.