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As we approach the end of the month, keen property buyers, sellers and investors may be wondering what changes, if any, are around the corner for home loan rates.
The Reserve Bank of Australia (RBA) board will meet on August 6 to discuss monetary policy and reach a decision about whether to raise, cut or maintain the official cash rate, which is currently at 2.75 per cent.
In the event that a change occurs, banks and other mortgage lenders will then have their own decision to make regarding how much of these changes to pass along to borrowers.
A lower cash rate could mean that buyers can lock in a more competitive fixed rate for several years, while an increase may have the effect of sustaining or growing demand for rental accommodation.
If you are thinking about making a move in the property market over the next few months, keep your eyes on the headlines to see what happens.
The Housing Industry Association (HIA) believes that the RBA board should make things easier for borrowers at its next meeting.
HIA senior economist Shane Garrett said in a July 25 statement that the residential construction sector could use a timely boost.
"Signs of a new home building recovery are narrowly based and spending on renovations is at a ten year low," said Mr Garrett.
He said that research had shown that a strong residential building industry had many positive flow on effects for the whole economy.
Citing the pressures of a growing population and low levels of new home building, Mr Garrett said that acting now would help to lift the constraints on Australian growth and prosperity.
"Holding off on a rate cut in August would simply add to the dominating mood of uncertainty," he said.
Real Estate Institute of Australia (REIA) president Peter Bushby also believes that the economy would benefit from interest rate cuts.
In a July 24 statement, he pointed to a 0.4 per cent rise in the consumer price index over the June quarter and an inflation rate of 2.4 per cent, which he said was "well within the RBA's target zone", as reasons to reduce the official cash rate.
"With inflation well under control and a subdued economy, it's appropriate we see a further cut in interest rates when the RBA board meets in August," Mr Bushby argued.
