The Reserve Bank of Australia (RBA) has met for their final meeting for 2016, and announced the official cash rate will remain unchanged at 1.5 per cent. We last saw rates fall in May and August this year, which brought the official cash rate to its lowest level in Australian history. The RBA will not meet again until February 2017, so the cash rate will stay at this record breaking low level at least until then.
There is a great deal of speculation about what the RBA’s next move will be. Some forecasters anticipate that rates will now stay on hold until later in 2017 and then start to rise as inflation improves. Others are predicting continuing low inflation and soft wages growth may influence another RBA cash rate cut to as low as 1.0 per cent next year, with the first cut coming as early as February next year. Either way, we can expect to see these very competitive home loan rates in the market for some time.
Regardless of what the RBA decide to do, lenders have been varying their rates outside of the RBA’s rate movements. Over recent weeks we have seen quite a few lenders increase their fixed rates, so if you are considering fixing some or all of your loan, now might be a good time to talk to us.
We are also seeing a more noticeable variance in the rates that are being offered by different lenders in the market. So if you have a current home loan, it’s worthwhile getting in touch to determine if your loan product is still right for your needs.
2016 has been a fascinating year. Global economic influences and developments in the US, such as the election of Donald Trump to the presidency, have caused a bit of uncertainty in the market. But overall it has been a strong year for home values here in Australia. From January to October this year, capital city home values grew by 9.1 per cent. Perth and Darwin are the only cities where values have fallen slightly for the first 10 months of the year.
Compared to the same time last year, combined capital city home values have increased by 7.5 per cent. This is trending up from 6.1 per cent at the end of July this year, with house values growing slightly higher than unit values across the country.
Summer is usually a slower time for Australian property markets, with much activity coming to a standstill over the Christmas period. However, the market activity in most of our capital cities is still quite strong.
According to Australian Property Monitors (APM), Melbourne listed 1173 auctions on Saturday 3 December alone, with a clearance rate of 80 per cent. Sydney also had a strong clearance rate of 76 per cent from 874 auctions on the same day. Other cities with strong auction numbers included Adelaide (160 auctions), and Brisbane (148 auctions), and even Canberra (with 81 auctions).
2016 has been a positive year in our property markets, and this looks set to continue into 2017! With the low interest rates we are seeing at the moment, it’s a great time for those in the market to purchase property, whether you’re a first home buyer, investor or refinancing an existing loan.
As this is our last newsletter for 2016, we’d like to take this opportunity to wish you and your family Merry Christmas and a safe and happy festive season. Thank you for your support throughout 2016, it’s been a big year for everyone, and we’re sure you’re looking forward to the break as much as we are! Thank you once again for your ongoing support, and we look forward to connecting in the New Year.