As was widely anticipated, the Reserve Bank of Australia (RBA) has again decided to leave official interest rates on hold at a record low of 1.5% at its final meeting for the year.
Interest rates have been steady since the last cut in August 2016.
This will be the last interest rate decision carried out by RBA for the year, as it is not due to meet again until February.
“Although rates remain on hold, the latest data continues to reflect a generally patchy at best performance by the national economy. Residential construction and retail sales trends have weakened with wages growth and inflation at record low levels,” said Dr. Andrew Wilson, real estate analyst and senior economist for the Domain Group.
Wilson further noted that the lower unemployment rates mask a sharp decline in full-time jobs as the Aussie dollar continues to track at higher than desirable levels. And while the housing markets remain “mostly buoyant,” with Sydney and Melbourne showing robust growth over spring and solid price growth continuing, other capital cities are reporting largely moderate or benign housing market activity.
“All of these factors considered together mean more official rate cuts remain likely in 2017 unless economic activity improves. These cuts would be irrespective of continuing strong house price growth in Sydney and Melbourne,” Wilson said.
However, if interest rates are slashed again in 2017, then property price growth could be above 6% in Sydney.