“The outlook for the balance of supply and demand in the housing market was important for the inflation outlook because housing costs make up a significant share of the CPI basket.”
These dry words from the Reserve Bank (RBA) indicate that it sees the housing market keeping a lid on inflation.
Consequently, interest rates will remain low.
In its Statement on Monetary Policy, the RBA was commenting on the large numbers of investment properties that are about to come on the market – which are likely to keep prices down in some locations.
The RBA has an inflation target of 2-3 per cent; inflation is now running below this target – such that the RBA has dropped rates to ultra-low levels to stimulate the economy.
And, with private sector wages growing just 1.98 per cent per year, there are many reasons why inflation will remain low.
The result? Interest rates would be lower, for longer.
If you want to know where the lowest rates are, please contact your C&N Broker. Call 1300 30 68 68 to get in touch with your nearest broker, or submit an online request for a broker to call you back.
Disclaimer: This article contains general information; before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs. Click for more detail regarding this disclaimer.