Recently, the Reserve Bank of Australia (RBA) provided good news for anyone looking for a home loan in Perth or across Australia. The official RBA interest rate will remain at 2.5%. In their November Board Meeting minutes, they provided the rationale behind their decision.
The RBA is satisfied that the housing market across Australia is continuing to recover, with national prices rising slightly above their peak levels in 2010. They also noted more housing turnover and more approval of home loans. RBA mentioned a sharp rise in high-density housing loan approvals, noting that both new housing and the established market had seen benefits from the lowered interest rates.
The board decided to keep the cash rate at its current level while continuing to monitor the market. They feel that the interest reductions have had the desired effects of bolstering the housing markets while keeping inflation “within targets.” The only bad news from RBA was their conviction that the dollar is too high for the Australian economy to achieve balanced growth.
Auction Clearance Rates
The weekly combined capital cities number for auctions increased from 2,548 to 2,814 from the week ending 10 November 2013 to the following week. For that week, the auction clearance rate was 67.4%, down from the previous week’s 68.3%.
Weekly Advertised Listings
In the 28 days ending 17 November 2013, 51,300 newly advertised properties appeared on the market. Listings rose 2.4% from the week ending 10 November to the week ending 17 November but are down 2.9% from the same period last year.
Across Australia, there were 253,816 properties listed on the market as of 17 November. This fell 4.0% from the previous week and 11.4% from last year.
What It all Means to You
Low interest rates have helped stimulate the market as intended and it is obvious that the RBA is happy with the current housing market. RBA is non-committal about the future, leaving the possibility of increases open.
Interest rates are low but prices haven’t spiked yet. For those who survived the contraction of the resource industry in WA, employment appears to be relatively stable. It’s a great time to buy a home.
To talk to a mortgage broker about a home loan in Greater Perth, call (08) 9472 9766.