The Reserve Bank of Australia (RBA) announced Tuesday that it was keeping the official policy rate at 1.5% for the 28th consecutive month, marking the longest period of stable rates ever.
Tim Lawless, Head of Research at CoreLogic, said this decision was not surprising given the diversity of economic conditions. Labor markets are improving, but wage growth has slowed and inflation has weakened.
Lawless said it was difficult to gauge the RBA's feeling about the current housing market, as the central bank continues to denounce the cooling in Sydney and Melbourne.
According to CoreLogic data released at the end of November, the Sydney market has already registered a 9.5% decline in its values ​​since its peak in July 2017. It is likely to exceed the previous record of decline of 9.6%. which was recorded during the last recession between 1989 and 1991.
Despite this weakness, the value of Sydney housing remains 41% higher than five years ago. The values ​​of Melbourne, meanwhile, remain 38% higher. These two largest cities in the country posted five-year growth rates well above those of most other capital markets.
Nevertheless, five of the eight capitals recorded a gain during the year. From a macro point of view, however, they weigh much less on national figures than Sydney and Melbourne.
In a separate survey by HashChing, nearly half (48%) of brokers agreed with Morgan Stanley's predictions that domestic property prices could fall as much as 15% in 2019.
It is however important to note that until now, it has not been observed that housing downturn affects household consumption or saving. Whatever it is, it will probably be a key factor that the RBA will monitor.
The RBA last lowered the money rate to a record low of 1.5% in August 2016, but 41% of HashChing respondents believe the money rate will rise in 2019.
Siobhan Hayden, director of operations at HashChing, believes the present is the perfect time to get a new home loan.
"The Christmas and New Year period is an expensive time of year and forces many of us to take into account our current financial situation. What's good is also a very competitive season in the market, making it the perfect time to look for a new mortgage or even help a loved one find the best rate, "she said. . "It is fantastic to see a slight increase in the number of borrowers taking active charge of their financial situation and anticipating the likely increases in interest rates in 2019."
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