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Reserve Bank runs a conservative race with interest rates

6 Nov 12

The Reserve Bank of Australia have taken the conservative approach in leaving the official cash rate on hold, despite expectations from the property market, that interest rates may fall today.

Real Estate Institute of SA President, Mr Greg Moulton, said that there was a wide-felt expectation that Melbourne Cup day may have seen a further rate drop, but this hasn’t eventuated.

“The market has slowly responded to the previous rates cuts and it would have been nice to see a drop down to the 3% mark for interest rates,” he said.

“There is no doubt that homebuyers and investors will watch the RBA’s next move before Christmas though.”

“A further rate cut before the new year would definitely be a positive for the housing market leading into 2013.”

Mr Moulton said that interest rates were top of mind when buyers were making the decision on whether to make a move and they can’t be ignored in the home affordability debate.

“Weekly repayments play on all homebuyer’s minds and it’s usually the first budgeted expense that people calculate, so any movement in rates is watched by all in the housing market.”