Interest rates on hold for fourth consecutive month

THE Reserve Bank has left the cash rate on hold at 2% for the fourth consecutive month.

The board sited a moderate pace of economic expansion with trade conditions softening in Asia but strengthening in the United States. 

Key commodity prices are much lower than a year ago, in part reflecting increased supply, including from Australia.

Overall, Australia's terms of trade are falling.

The decision to leave rates on hold was tipped by the majority of economists, with money expert Michelle Hutchinson saying 78% of experts surveyed by do not expect a change to the rate at all this year. 

The other 16 %  believe rates will be cut again by the year's end.

"Despite no change to the cash rate, those looking to enter the property market can expect stiff competition this mortgage season," Ms Hutchinson said. 

"We're anticipating more people will take out home loans this mortgage season than any other time this year - 163,105 loans are predicted this Spring (September to November 2015), according to research on total number of home loans financed for owner occupiers, including non-first home buyers and those who are refinancing.

"In addition, the property market exceeded expectations in Autumn and Winter this year, with the number of owner-occupied home loans financed up by almost 14,000 on the same period last year.

"Coming out of a very strong winter period - which is traditionally a quieter time for real estate sales - only indicates that the property market remains strong and that buyers can expect to face a fair share of competition on the auction circuit this spring."

In its statement after today's meeting the RBA said it expects to start increasing its policy rate over the "period ahead".

Topics:  editors picks finances home loan interest rates money mortgage reserve bank

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