Cash Rate On Hold
A stronger than expected inflation result and improvement in business confidence has encouraged the Reserve Bank of Australia to leave the official cash rate on hold at 2.5% for the sixth consecutive month.
From a housing market perspective, the recent release of the RP Data – Rismark Home Value Indices showed home values were still rising across Australia, up a strong 1.2% over the month of January. The latest housing market results take annual capital gains across the combined capital cities to 9.8%, with every capital city apart from Hobart recording a rise in dwelling values over the year.
Consumer confidence currently remains comfortably in the zone where optimists outnumber pessimists. According to the latest Westpac Melbourne Institute of Consumer Sentiment Index. Australians are relatively optimistic about the economy, and there is evidence that both house prices and housing activity are responding well to the low interest rate environment.
Despite there being an upwards trend in fixed rates towards the end of 2013 smaller lenders are making an aggressive push into the market for fixed-rate home loans, with new figures showing lenders outside the big four banks pinched a significant number of new customers last year.
The jump has come as competition for the fixed-rate market continues to heat up, The non-majors have been agile and focused on service delivery, targeting specific borrowers, and using very attractive fixed rate deals to great effect.
Please remember to obtain independent advice on what would work best for you is an important part of setting up any finance platform that you are considering.
As always, please feel free to call us at any time if you wish to review your current finances
Adrian Rogers - Director / MFAA Credit Adviser
Peter Cleary - MFAA Credit Adviser
Until next time...