Cash rate remains at 1.50%
The RBA has maintained its current monetary policy position and decided not to change the official cash rate during today’s board meeting. A rebound in GDP, steady employment growth and ongoing housing market strength have combined to influence toady’s result.
The RBA's decision, keeps the official cash rate steady at the record low of 1.50%.
Source: RBA, ABS, CoreLogic
- Capital city home values rose 1.4% in January and 11.7% over the past year.
- Canberra saw the largest value growth over the past month up 3.2% followed by Sydney (2.6%), Melbourne (1.5%) and Hobart (1.0%).
- New listings are lower, compared to this time last year, across all states and territories (Tasmania aside).
- Nationally, new listings are down -2.9% and total listings are down -8.1%, compared to this time last year.
- Hobart has the largest deficit of total listings being -35% lower than last year. This is followed by Sydney (-11.3%), Canberra (-6.2%), Melbourne (-5.1%) and Darwin (-4.3%).
- Darwin continues to have the highest gross rental house yields at 5.1% followed by Hobart (5.0%), Brisbane (4.1%), Adelaide (4.0%) and Canberra (4.0%).
- The unemployment rate declined slightly to 5.7% in January 2017.
- GDP rose 1.1% in the December quarter and 2.4% over the year.
- The Australian dollar fluctuated between US$0.75 and US$0.77 over the past month.
Recent comments by RBA Governor Philip Lowe provide an insight into how the bank views the direction and strength of the economy. Importantly, the governor highlighted that two major concerns that the bank has is the rising level of household debt and strong property price growth.
Given his emphasis on these two items, its more than likely that there will be no further cuts to the official cash rate in the short term. This is despite the fact that inflation remains soft, wage growth is weak and underemployment of the labour force has increased.
Given the RBA’s neutral monetary policy position, it is now more important than ever that the federal government drives its fiscal policy agenda forward to help stimulate growth, grow business investment and boost employment.