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
