At its meeting today, the RBA Board decided to leave the cash rate unchanged at 0.75 per cent.

Statement by RBA’s Philip Lowe:

The outlook for the global economy remains reasonable. There have been signs that the slowdown in global growth that started in 2018 is coming to an end. Global growth is expected to be a little stronger this year and next than it was last year and inflation remains low almost everywhere. One continuing source of uncertainty, despite recent progress, is the trade and technology dispute between the US and China, which has affected international trade flows and investment. Another source of uncertainty is the coronavirus, which is having a significant effect on the Chinese economy at present. It is too early to determine how long-lasting the impact will be.

Interest rates are very low around the world and a number of central banks eased monetary policy over the second half of last year. There is an expectation of a little further monetary easing in some economies. Long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are at historically low levels. The Australian dollar is around its lowest level over recent times.

The central scenario is for the Australian economy to grow by around 2¾ per cent this year and 3 per cent next year, which would be a step up from the growth rates over the past two years. In the short term, the bushfires and the coronavirus outbreak will temporarily weigh on domestic growth. The household sector has been adjusting to a protracted period of slow wages growth and, last year, to a decline in housing prices, with the result that consumption has been quite weak. Following this period of balance-sheet adjustment, consumption growth is expected to pick up gradually. The overall outlook is also being supported by the low level of interest rates, recent tax refunds, ongoing spending on infrastructure, a brighter outlook for the resources sector and, later this year, an expected recovery in residential construction.

The unemployment rate declined in December to 5.1 per cent. It is expected to remain around this level for some time, before gradually declining to a little below 5 per cent in 2021. Wages growth is subdued and is expected to remain at around its current rate for some time yet. A further gradual lift in wages growth would be a welcome development and is needed for inflation to be sustainably within the 2–3 per cent target range. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

Inflation remains low and stable. Over 2019, CPI inflation was 1.8 per cent and underlying inflation was a little lower than this. The central scenario is for CPI inflation to be around 2 per cent in the near term and to fluctuate around that rate over the next couple of years. In underlying terms, inflation is expected to increase gradually to 2 per cent over the next couple of years.

There are continuing signs of a pick-up in established housing markets. This is especially so in Sydney and Melbourne, but prices in some other markets have also increased. Mortgage loan commitments have also picked up, although demand for credit by investors remains subdued. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality. Credit conditions for small and medium-sized businesses remain tight.

The easing of monetary policy last year is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. The lower cash rate has put downward pressure on the exchange rate, which is supporting activity across a range of industries. Lower interest rates have assisted with the process of household balance sheet adjustment. They have also boosted asset prices, which in time should lead to increased spending, including on residential construction. Progress is expected towards the inflation target and towards full employment, but that progress is expected to remain gradual.

With interest rates having already been reduced to a very low level and recognising the long and variable lags in the transmission of monetary policy, the Board decided to hold the cash rate steady at this meeting. Due to both global and domestic factors, it is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board will continue to monitor developments carefully, including in the labour market. It remains prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.

Need help with your finances or want to discuss your how interest rate changes could affect your situation? We’re as close as your phone – call 08 8451 1500

Sam, Matt & Andy
Urbantech Group
>>  See all of our best home loan rates here + a lot more…

We hope you enjoyed our post: The RBA’s interest rate statement for February 2020

At its meeting today, the RBA Board decided to leave the cash rate unchanged at 0.75 per cent.

Statement by RBA’s Philip Lowe:

The outlook for the global economy remains reasonable. While the risks are still tilted to the downside, some of these risks have lessened recently. The US–China trade and technology disputes continue to affect international trade flows and investment as businesses scale back spending plans because of the uncertainty. At the same time, in most advanced economies unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken steps to support the economy while continuing to address risks in the financial system.

Interest rates are very low around the world and a number of central banks have eased monetary policy over recent months in response to the downside risks and subdued inflation. Expectations of further monetary easing have generally been scaled back. Financial market sentiment has continued to improve and long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are at historically low levels. The Australian dollar is at the lower end of its range over recent times.

After a soft patch in the second half of last year, the Australian economy appears to have reached a gentle turning point. The central scenario is for growth to pick up gradually to around 3 per cent in 2021. The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, the upswing in housing prices and a brighter outlook for the resources sector should all support growth. The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending. Other sources of uncertainty include the effects of the drought and the evolution of the housing construction cycle.

The unemployment rate has been steady at around 5¼ per cent over recent months. It is expected to remain around this level for some time, before gradually declining to a little below 5 per cent in 2021. Wages growth is subdued and is expected to remain at around its current rate for some time yet. A further gradual lift in wages growth would be a welcome development and is needed for inflation to be sustainably within the 2–3 per cent target range. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

Inflation is expected to pick up, but to do so only gradually. In both headline and underlying terms, inflation is expected to be close to 2 per cent in 2020 and 2021.

There are further signs of a turnaround in established housing markets. This is especially so in Sydney and Melbourne, but prices in some other markets have also increased recently. In contrast, new dwelling activity is still declining and growth in housing credit remains low. Demand for credit by investors is subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

The easing of monetary policy this year is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. The lower cash rate has put downward pressure on the exchange rate, which is supporting activity across a range of industries. It has also boosted asset prices, which in time should lead to increased spending, including on residential construction. Lower mortgage rates are also boosting aggregate household disposable income, which, in time, will boost household spending.

Given these effects of lower interest rates and the long and variable lags in the transmission of monetary policy, the Board decided to hold the cash rate steady at this meeting while it continues to monitor developments, including in the labour market. The Board also agreed that due to both global and domestic factors, it was reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.

Need help with your finances or want to discuss your how interest rate changes could affect your situation? We’re as close as your phone – call 08 8451 1500

Sam, Matt & Andy
Urbantech Group
>>  See all of our best home loan rates here + a lot more…

We hope you enjoyed our post: The RBA’s interest rate statement for December 2019

At its meeting today, the RBA Board decided to leave the cash rate unchanged at 0.75 per cent.

Statement by RBA’s Philip Lowe:

While the outlook for the global economy remains reasonable, the risks are tilted to the downside. The US–China trade and technology disputes continue to affect international trade flows and investment as businesses scale back spending plans because of the uncertainty. At the same time, in most advanced economies, unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken steps to support the economy while continuing to address risks in the financial system.

Interest rates are very low around the world and a number of central banks have eased monetary policy in response to the persistent downside risks and subdued inflation. Expectations of further monetary easing have generally been scaled back over the past month and financial market sentiment has improved a little. Even so, long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are also at historically low levels. The Australian dollar is at the lower end of its range over recent times.

The outlook for the Australian economy is little changed from three months ago. After a soft patch in the second half of last year, a gentle turning point appears to have been reached. The central scenario is for the Australian economy to grow by around 2¼ per cent this year and then for growth gradually to pick up to around 3 per cent in 2021. The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, the upswing in housing prices in some markets and a brighter outlook for the resources sector should all support growth. The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending. Other sources of uncertainty include the effects of the drought and the evolution of the housing construction cycle.

Employment has continued to grow strongly and has been matched by strong growth in labour supply, with labour force participation at a record high. The unemployment rate has remained steady at around 5¼ per cent over recent months. It is expected to remain around this level for some time, before gradually declining to a little below 5 per cent in 2021. Wages growth remains subdued and is expected to remain at around its current rate for some time yet. A further gradual lift in wages growth would be a welcome development and is needed for inflation to be sustainably within the 2–3 per cent target range. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

The recent inflation data were broadly as expected, with headline inflation at 1.7 per cent over the year to the September quarter. The central scenario remains for inflation to pick up, but to do so only gradually. In both headline and underlying terms, inflation is expected to be close to 2 per cent in 2020 and 2021.

There are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne. In contrast, new dwelling activity is still declining and growth in housing credit remains low. Demand for credit by investors is subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

The easing of monetary policy since June is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. Given global developments and the evidence of the spare capacity in the Australian economy, it is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.

Need help with your finances or want to discuss your how interest rate changes could affect your situation? We’re as close as your phone – call 08 8451 1500

Sam, Matt & Andy
Urbantech Group
>>  See all of our best home loan rates here + a lot more…

We hope you enjoyed our post: The RBA’s interest rate statement for November 2019

At its meeting today, the RBA Board decided to lower the cash rate by 25 basis points to 0.75 per cent.

Statement by RBA’s Philip Lowe:

While the outlook for the global economy remains reasonable, the risks are tilted to the downside. The US–China trade and technology disputes are affecting international trade flows and investment as businesses scale back spending plans because of the increased uncertainty. At the same time, in most advanced economies, unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken further steps to support the economy, while continuing to address risks in the financial system.

Interest rates are very low around the world and further monetary easing is widely expected, as central banks respond to the persistent downside risks to the global economy and subdued inflation. Long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are also at historically low levels. The Australian dollar is at its lowest level of recent times.

The Australian economy expanded by 1.4 per cent over the year to the June quarter, which was a weaker-than-expected outcome. A gentle turning point, however, appears to have been reached with economic growth a little higher over the first half of this year than over the second half of 2018. The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some established housing markets and a brighter outlook for the resources sector should all support growth. The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending.

Employment has continued to grow strongly and labour force participation is at a record high. The unemployment rate has, however, remained steady at around 5¼ per cent over recent months. Forward-looking indicators of labour demand indicate that employment growth is likely to slow from its recent fast rate. Wages growth remains subdued and there is little upward pressure at present, with increased labour demand being met by more supply. Caps on wages growth are also affecting public-sector pay outcomes across the country. A further gradual lift in wages growth would be a welcome development. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

Inflation pressures remain subdued and this is likely to be the case for some time yet. In both headline and underlying terms, inflation is expected to be a little under 2 per cent over 2020 and a little above 2 per cent over 2021.

There are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne. In contrast, new dwelling activity has weakened and growth in housing credit remains low. Demand for credit by investors is subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

The Board took the decision to lower interest rates further today to support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target. The economy still has spare capacity and lower interest rates will help make inroads into that. The Board also took account of the forces leading to the trend to lower interest rates globally and the effects this trend is having on the Australian economy and inflation outcomes.

It is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.

Need help with your finances or want to discuss your how interest rate changes could affect your situation? We’re as close as your phone – call 08 8451 1500

Sam, Matt & Andy
Urbantech Group
>>  See all of our best home loan rates here + a lot more…

We hope you enjoyed our post: The RBA’s interest rate statement for October 2019

At its meeting today, the RBA Board decided to leave the cash rate unchanged at 1.00 per cent.

Statement by RBA’s Philip Lowe:

The outlook for the global economy remains reasonable, although the risks are tilted to the downside. The trade and technology disputes are affecting international trade flows and investment as businesses scale back spending plans due to the increased uncertainty. At the same time, in most advanced economies, unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken further steps to support the economy, while continuing to address risks in the financial system.

Global financial conditions remain accommodative. The persistent downside risks to the global economy combined with subdued inflation have led a number of central banks to reduce interest rates this year and further monetary easing is widely expected. Long-term government bond yields have declined and are at record lows in many countries, including Australia. Borrowing rates for both businesses and households are also at historically low levels. The Australian dollar is at its lowest level of recent times.

Economic growth in Australia over the first half of this year has been lower than earlier expected, with household consumption weighed down by a protracted period of low income growth and declining housing prices and turnover. Looking forward, growth in Australia is expected to strengthen gradually to be around trend over the next couple of years. The outlook is being supported by the low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some established housing markets and a brighter outlook for the resources sector. The main domestic uncertainty continues to be the outlook for consumption, although a pick-up in growth in household disposable income and a stabilisation of the housing market are expected to support spending.

Employment has grown strongly over recent years and labour force participation is at a record high. The unemployment rate has, however, remained steady at 5.2 per cent over recent months. Wages growth remains subdued and there is little upward pressure at present, with strong labour demand being met by more supply. Caps on wages growth are also affecting public-sector pay outcomes across the country. A further gradual lift in wages growth would be a welcome development. Taken together, recent labour market outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

Inflation pressures remain subdued and this is likely to be the case for some time yet. In both headline and underlying terms, inflation is expected to be a little under 2 per cent over 2020 and a little above 2 per cent over 2021.

There are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne. In contrast, new dwelling activity has weakened. Growth in housing credit remains low. Demand for credit by investors continues to be subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

It is reasonable to expect that an extended period of low interest rates will be required in Australia to make progress in reducing unemployment and achieve more assured progress towards the inflation target. The Board will continue to monitor developments, including in the labour market, and ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time.

Need help with your finances or want to discuss your how interest rate changes could affect your situation? We’re as close as your phone – call 08 8451 1500

Sam, Matt & Andy
Urbantech Group
>>  See all of our best home loan rates here + a lot more…

We hope you enjoyed our post: The RBA’s interest rate statement for September 2019

At its meeting today, the RBA Board decided to leave the cash rate unchanged at 1.00 per cent.

Statement by RBA’s Philip Lowe:

The outlook for the global economy remains reasonable. However, the increased uncertainty generated by the trade and technology disputes is affecting investment and means that the risks to the global economy remain tilted to the downside. In most advanced economies, unemployment rates are low and wages growth has picked up, although inflation remains low. The slowdown in global trade has contributed to slower growth in Asia. In China, the authorities have taken steps to support the economy, while continuing to address risks in the financial system.

Global financial conditions remain accommodative. The persistent downside risks to the global economy combined with subdued inflation have led a number of central banks to reduce interest rates this year and further monetary easing is widely expected. Long-term government bond yields have declined further and are at record lows in many countries, including Australia. Borrowing rates for both businesses and households are also at historically low levels. The Australian dollar is at its lowest level of recent times.

Economic growth in Australia over the first half of this year has been lower than earlier expected, with household consumption weighed down by a protracted period of low income growth and declining housing prices. Looking forward, growth in Australia is expected to strengthen gradually from here. The central scenario is for the Australian economy to grow by around 2½ per cent over 2019 and 2¾ per cent over 2020. The outlook is being supported by the low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some housing markets and a brighter outlook for the resources sector. The main domestic uncertainty continues to be the outlook for consumption, although a pick-up in growth in household disposable income and a stabilisation of the housing market are expected to support spending.

Employment has grown strongly over recent years and labour force participation is at a record high. There has, however, been little inroad into the spare capacity in the labour market recently, with the unemployment rate having risen slightly to 5.2 per cent. The unemployment rate is expected to decline over the next couple of years to around 5 per cent. Wages growth remains subdued and there is little upward pressure at present, with strong labour demand being met by more supply. Caps on wages growth are also affecting public-sector pay outcomes across the country. A further gradual lift in wages growth would be a welcome development. Taken together, recent labour market outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

The recent inflation data were broadly as expected and confirmed that inflation pressures remain subdued across much of the economy. Over the year to the June quarter, inflation was 1.6 per cent in both headline and underlying terms. The central scenario remains for inflation to increase gradually, but it is likely to take longer than earlier expected for inflation to return to 2 per cent. In both headline and underlying terms, inflation is expected to be a little under 2 per cent over 2020 and a little above 2 per cent over 2021.

Conditions in most housing markets remain soft, although there are some signs of a turnaround, especially in Sydney and Melbourne. Growth in housing credit remains low. Demand for credit by investors continues to be subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

It is reasonable to expect that an extended period of low interest rates will be required in Australia to make progress in reducing unemployment and achieve more assured progress towards the inflation target. The Board will continue to monitor developments in the labour market closely and ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time.

Need help with your finances or want to discuss your how interest rate changes could affect your situation? We’re as close as your phone – call 08 8451 1500

Sam, Matt & Andy
Urbantech Group
>>  See all of our best home loan rates here + a lot more…

We hope you enjoyed our post: The RBA’s interest rate statement for August 2019

At its meeting today, the RBA Board decided to lower the cash rate by 25 basis points to 1.00 per cent.

Statement by RBA’s Philip Lowe:

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.00 per cent. This follows a similar reduction at the Board’s June meeting. This easing of monetary policy will support employment growth and provide greater confidence that inflation will be consistent with the medium-term target.

The outlook for the global economy remains reasonable. However, the uncertainty generated by the trade and technology disputes is affecting investment and means that the risks to the global economy are tilted to the downside. In most advanced economies, inflation remains subdued, unemployment rates are low and wages growth has picked up. The slowdown in global trade has contributed to slower growth in Asia. In China, the authorities have taken steps to support the economy, while continuing to address risks in the financial system.

Global financial conditions remain accommodative. The persistent downside risks to the global economy combined with subdued inflation have led to expectations of easing of monetary policy by the major central banks. Long-term government bond yields have declined further and are at record lows in a number of countries, including Australia. Bank funding costs in Australia have also declined, with money-market spreads having fully reversed the increases that took place last year. Borrowing rates for both businesses and households are at historically low levels. The Australian dollar is at the low end of its narrow range of recent times.

Over the year to the March quarter, the Australian economy grew at a below-trend 1.8 per cent. Consumption growth has been subdued, weighed down by a protracted period of low income growth and declining housing prices. Increased investment in infrastructure is providing an offset and a pick-up in activity in the resources sector is expected, partly in response to an increase in the prices of Australia’s exports. The central scenario for the Australian economy remains reasonable, with growth around trend expected. The main domestic uncertainty continues to be the outlook for consumption, although a pick-up in growth in household disposable income is expected to support spending.

Employment growth has continued to be strong. Labour force participation is at a record level, the vacancy rate remains high and there are reports of skills shortages in some areas. There has, however, been little inroad into the spare capacity in the labour market recently, with the unemployment rate having risen slightly to 5.2 per cent. The strong employment growth over the past year or so has led to a pick-up in wages growth in the private sector, although overall wages growth remains low. A further gradual lift in wages growth is still expected and this would be a welcome development. Taken together, these labour market outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

Inflation pressures remain subdued across much of the economy. Inflation is still, however, anticipated to pick up, and will be boosted in the June quarter by increases in petrol prices. The central scenario remains for underlying inflation to be around 2 per cent in 2020 and a little higher after that.

Conditions in most housing markets remain soft, although there are some tentative signs that prices are now stabilising in Sydney and Melbourne. Growth in housing credit has also stabilised recently. Demand for credit by investors continues to be subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

Today’s decision to lower the cash rate will help make further inroads into the spare capacity in the economy. It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target. The Board will continue to monitor developments in the labour market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time.

Need help with your finances or want to discuss your how interest rate changes could affect your situation? We’re as close as your phone – call 08 8451 1500

Sam, Matt & Andy
Urbantech Group
>>  See all of our best home loan rates here + a lot more…

We hope you enjoyed our post: The RBA’s interest rate statement for July 2019

At its meeting today, the RBA Board decided to lower the cash rate by 25 basis points to 1.25 per cent.

Statement by RBA’s Philip Lowe:

The Board took this decision to support employment growth and provide greater confidence that inflation will be consistent with the medium-term target.

The outlook for the global economy remains reasonable, although the downside risks stemming from the trade disputes have increased. Growth in international trade remains weak and the increased uncertainty is affecting investment intentions in a number of countries. In China, the authorities have taken steps to support the economy, while addressing risks in the financial system. In most advanced economies, inflation remains subdued, unemployment rates are low and wages growth has picked up.

Global financial conditions remain accommodative. Long-term bond yields and risk premiums are low. In Australia, long-term bond yields are at historically low levels. Bank funding costs have also declined further, with money-market spreads having fully reversed the increases that took place last year. The Australian dollar has depreciated a little over the past few months and is at the low end of its narrow range of recent times.

The central scenario remains for the Australian economy to grow by around 2¾ per cent in 2019 and 2020. This outlook is supported by increased investment in infrastructure and a pick-up in activity in the resources sector, partly in response to an increase in the prices of Australia’s exports. The main domestic uncertainty continues to be the outlook for household consumption, which is being affected by a protracted period of low income growth and declining housing prices. Some pick-up in growth in household disposable income is expected and this should support consumption.

Employment growth has been strong over the past year, labour force participation has been increasing, the vacancy rate remains high and there are reports of skills shortages in some areas. Despite these developments, there has been little further inroads into the spare capacity in the labour market of late. The unemployment rate had been steady at around 5 per cent for some months, but ticked up to 5.2 per cent in April. The strong employment growth over the past year or so has led to a pick-up in wages growth in the private sector, although overall wages growth remains low. A further gradual lift in wages growth is expected and this would be a welcome development. Taken together, these labour market outcomes suggest that the Australian economy can sustain a lower rate of unemployment.

The recent inflation outcomes have been lower than expected and suggest subdued inflationary pressures across much of the economy. Inflation is still however anticipated to pick up, and will be boosted in the June quarter by increases in petrol prices. The central scenario remains for underlying inflation to be 1¾ per cent this year, 2 per cent in 2020 and a little higher after that.

The adjustment in established housing markets is continuing, after the earlier large run-up in prices in some cities. Conditions remain soft, although in some markets the rate of price decline has slowed and auction clearance rates have increased. Growth in housing credit has also stabilised recently. Credit conditions have been tightened and the demand for credit by investors has been subdued for some time. Mortgage rates remain low and there is strong competition for borrowers of high credit quality.

Today’s decision to lower the cash rate will help make further inroads into the spare capacity in the economy. It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target. The Board will continue to monitor developments in the labour market closely and adjust monetary policy to support sustainable growth in the economy and the achievement of the inflation target over time.

Need help with your finances or want to discuss your how interest rate changes could affect your situation? We’re as close as your phone – call 08 8451 1500

Sam, Matt & Andy
Urbantech Group
>>  See all of our best home loan rates here + a lot more…

We hope you enjoyed our post: The RBA’s interest rate statement for June 2019

At its meeting today, the RBA Board decided to leave the cash rate unchanged at 1.50 per cent.

Statement by RBA’s Philip Lowe:

The outlook for the global economy remains reasonable, although the risks are tilted to the downside. Growth in international trade has declined and investment intentions have softened in a number of countries. In China, the authorities have taken steps to support the economy, while addressing risks in the financial system. In most advanced economies, inflation remains subdued, unemployment rates are low and wages growth has picked up.

Global financial conditions remain accommodative. Long-term bond yields are low, consistent with the subdued outlook for inflation, and equity markets have strengthened. Risk premiums also remain low. In Australia, long-term bond yields are at historically low levels and short-term bank funding costs have declined further. Some lending rates have declined recently, although the average mortgage rate paid is unchanged. The Australian dollar is at the low end of its narrow range of recent times.

The central scenario is for the Australian economy to grow by around 2¾ per cent in 2019 and 2020. This outlook is supported by increased investment in infrastructure and a pick-up in activity in the resources sector, partly in response to an increase in the prices of Australia’s exports. The main domestic uncertainty continues to be the outlook for household consumption, which is being affected by a protracted period of low income growth and declining housing prices. Some pick-up in growth in household disposable income is expected and this should support consumption.

The Australian labour market remains strong. There has been a significant increase in employment, the vacancy rate remains high and there are reports of skills shortages in some areas. Despite these positive developments, there has been little further progress in reducing unemployment over the past six months. The unemployment rate has been broadly steady at around 5 per cent over this time and is expected to remain around this level over the next year or so, before declining a little to 4¾ per cent in 2021. The strong employment growth over the past year or so has led to some pick-up in wages growth, which is a welcome development. Some further lift in wages growth is expected, although this is likely to be a gradual process.

The adjustment in established housing markets is continuing, after the earlier large run-up in prices in some cities. Conditions remain soft and rent inflation remains low. Credit conditions for some borrowers have tightened over the past year or so. At the same time, the demand for credit by investors in the housing market has slowed noticeably as the dynamics of the housing market have changed. Growth in credit extended to owner-occupiers has eased over the past year. Mortgage rates remain low and there is strong competition for borrowers of high credit quality.

The inflation data for the March quarter were noticeably lower than expected and suggest subdued inflationary pressures across much of the economy. Over the year, inflation was 1.3 per cent and, in underlying terms, was 1.6 per cent. Lower housing-related costs and a range of policy decisions affecting administered prices both contributed to this outcome. Looking forward, inflation is expected to pick up, but to do so only gradually. The central scenario is for underlying inflation to be 1¾ per cent this year, 2 per cent in 2020 and a little higher after that. In headline terms, inflation is expected to be around 2 per cent this year, boosted by the recent increase in petrol prices.

The Board judged that it was appropriate to hold the stance of policy unchanged at this meeting. In doing so, it recognised that there was still spare capacity in the economy and that a further improvement in the labour market was likely to be needed for inflation to be consistent with the target. Given this assessment, the Board will be paying close attention to developments in the labour market at its upcoming meetings.

Need help with your finances or want to discuss your how interest rate changes could affect your situation? We’re as close as your phone – call 08 8451 1500

Sam, Matt & Andy
Urbantech Group
>>  See all of our best home loan rates here + a lot more…

We hope you enjoyed our post: The RBA’s interest rate statement for May 2019

We’ve been saying it for a while so it’s great to see the ‘experts’ agreeing – if you’re searching for the next property hotspot look no further than Brisbane, and to a lesser extent Adelaide.

Unlike its eastern state counterparts, Brisbane has only experienced marginal house price growth over the past 5-7 years. However, with Melbourne and Sydney house prices now in decline investors have begun shifting their focus to the Greater Brisbane markets, which includes Brisbane, Ipswich, Logan, Moreton Bay and Redland.

In addition to the increased demand from interstate investors, these areas all display the necessary fundamentals required for house price growth – high rental yields, population growth, extensive infrastructure project spend and strong employment.

So if you missed out on profiting from the recent Melbourne and Sydney house price boom you definitely won’t want to miss the opportunity to invest in Brisbane. In fact, prices are already well and truly on the rise in some suburbs so the window of opportunity is already starting to close.

Just like the price growth in Melbourne and Sydney this really is a once-in-a-decade opportunity to get in at the right time and ride the wave. In fact, Brisbane property prices are much more affordable and the rental yields are higher. What it means is you’re able to buy cash-flow positive property which now has the potential of achieving double digit price growth. That’s what I call that the best of both worlds!

So where to from here?

If you want to make sure you get in to the Brisbane market before prices take off we can help. We have hand-selected a range of cash flow positive [+$100 to $200 pw] house & land packages, including duals occs and duplexes, in the very best growth areas of Greater Brisbane.

For more details and to explore these investment options, please email sam@realinvestar.com.au or call me on 0411 431 391 for a chat.

If you’re serious about setting yourself up for the future, make sure you take action!

We’ve reprinted The Courier Mail article in its entirety below for your to read…

As the property market slows in Sydney and Melbourne, experts have pegged this capital city as the best to invest with a boom on the horizon.

Brisbane has been in line as the next capital to boom for a long time but it could finally be the city’s time to shine, with predictions it will soon be leading the property growth charts.

The River City is the hot favourite for investment, according to the latest Property Investment Professionals of Australia (PIPA) survey with 44 per cent of respondents believing it is the capital city with the best prospects, up from 43 per cent last year.

About 26 per cent picked Melbourne, down from 32 per cent last year, while only 8 per cent chose Sydney as having investment potential.

PIPA chairman Peter Koulizos says with growth just around the corner, now is the time for investors to be buying in Brisbane.

“If you’re looking at a time frame of five to seven years, Sydney is not the place to go, because it’s already had its big rise, and Melbourne is the same,” he says.

“Hobart has got another one year to 18 months of steam left in the tank and it will flatten out and Perth is really not going to do too well until the price of iron ore goes up.

“From a property cycle point of view, which has a big impact on prices, it’s time for Brisbane and Adelaide to shine.

“I’ve been saying that for years and nothing has happened, but sooner or later – and more sooner than later – you will see Brisbane and Adelaide at the top of the capital growth tables.”

Brisbane buyers’ agent Wendy Russell says many investors, both local and interstate, have already identified Brisbane’s investment potential.

“The perception amongst investors I speak to is that the Brisbane market is still very affordable when compared to Sydney and Melbourne and there is a strong feeling it has not yet reached its peak,” she says.

“Our population is growing, our infrastructure is improving and as a result, employment prospects in our city are strong.

“With big ticket developments already underway such as Queen’s Wharf, Howard Smith Wharves, the Cross River Rail and the airport’s second runway,

Brisbane is notably ‘growing up’ and being recognised as a stand out capital city in its own right, rather than a second cousin of Sydney and Melbourne, with which it has long been associated.”

Russell says Brisbane is likely to see a jump in average house prices across the city as these developments are completed.

“To get into the market while prices are affordable and interest rates are still low would be a smart move,” she says.

In recent times, Brisbane has maintained steady and sustainable growth, with the latest data from the Real Estate Institute of Queensland showing house prices grew by 2.5% over the past year to reach a new record median of $673,000.

CoreLogic data shows the capital’s median dwelling price has risen by 0.9% over the past year to sit at just under $500,000, compared to a fall of 5.6% and 1.7% in Sydney and Melbourne.

Brisbane and Adelaide has “done nothing” since the GFC about 10 years ago, according to Koulizos.

He says the longer the period of inactivity, the better the upswing of the property cycle will be due to pent up demand – and the bigger the price rises.

He says the biggest growth driver of the Brisbane market is migration of people from New South Wales to Queensland, which generally happens at the end of a Sydney property boom.

It’s largely retirees who move, he says, to a more affordable location, where their money will go much further.

While interstate buyers – particularly retirees – are fuelling the property market in Brisbane, Koulizos says investors are more likely to be locals identifying the value in the market.

Investors from Sydney and Melbourne have experienced a fall in confidence aligning with a significant fall in property values in those cities, he adds, despite Brisbane experiencing steady and stable growth.

Across the board, investors in Australia have been less active in recent times due to a range of factors including uncertainty around prices and interest rates, and tighter lending restrictions.

The latest data from the Australian Bureau of Statistics (ABS) found the value of investment housing fell 1.3 per cent to $10 billion between June and July 2018, reaching a five-year low.

But Suncorp Head of Stores and Optimisation Chris Fleming says investors are continuing to be active in Queensland, not just in the Brisbane market, but in the growth corridor between the capital and the Gold Coast.

“As property prices continue to fluctuate in Sydney and Melbourne, more interstate investors could see Brisbane as a more attractive investment opportunity,” he says.

While lending has tightened up across the board, and particularly for investors, Fleming says lenders see Brisbane as a more stable investment environment than other capital cities. The steady and stable growth in prices, with no huge falls, also means lenders can be more certain about how much people can borrow.

“We’ve seen a lot more stability in Brisbane versus Sydney and Melbourne in recent months, so the opportunity for people in Brisbane to understand their equity position and work out what their lending potential looks like is more consistent,” he says.

For investors, rental yields in Brisbane are around 4.5%, compared to around 3% in Sydney and Melbourne, which also makes the city a more attractive prospect for lenders.

Fleming says the investment lending environment is more complex than it has been before, and that has the potential to impact people’s confidence in both buying and selling.

The recently released Suncorp Home Index survey found 60% of people nationally currently have no plans to buy, sell or renovate their home, rising to 62% in Queensland.

“The lending environment and a discussion around property prices makes people think twice about what is the answer for them, and many are holding onto what they’ve got,” he says.

But caution isn’t necessarily a bad thing, adds Fleming.
“People are considering their financial position carefully and are spending more time planning what that looks like in the future, which will set more people up for success,” he says. “The tighter focus on lending – and specifically customer’s capacity to repay – will continue to be a focus in financial services, and I think that’s important.”

For those that do get into the market, risk reduction strategies such as landlord insurance, which helps to protect landlords from financial loss relating to renting their investment property, is a key part of any investment plan, says Fleming.

“Landlord insurance is crucial for any investors, to give them peace of mind that their investment is protected, especially when the investment is in another capital city altogether.”

Apart from investors, first homebuyers are also quite active, says Fleming, with the Suncorp Home Index survey finding 11% of respondents are looking to or in the process of buying their first home, with 71% working towards buying by saving a deposit.

Recent data from the ABS also found the level of first homebuyers is the highest since 2010.

“There’s renewed optimism in having the ability to buy your first home,” Fleming says.

Russell says first homebuyers in Brisbane are opting for townhouses closer to the city – within 10 kilometres – around the $500,000 price bracket, as well as existing houses handy to transport.

This article was originally published by The Courier Mail here – https://www.couriermail.com.au/feature/special-features/brisbane-is-next-to-boom-say-investing-experts/news-story/7a40df4f96d5770cf0176fa4e6429418

>> For more market insight and analysis call me on 0411 431 391 or email sam@realinvestar.com.au

Cheers,

Sam
RealInvestar.com.au

LEARN MORE…

– Want help building your property portfolio? We’ll show you how to build a passive income of $83,200 pa with only 4 investment properties click here

– To learn why we recommend buying investment property in south-east QLD click here

– To learn more about the benefits of investing in Dual Income Property click here

We hope you enjoyed our post: Brisbane is next to boom, say investment experts…