As the winter property season and end of financial year (EOFY) are upon us, the Australian property market would usually slow down during the cooler months, but experts say with current buyer demand and low interest rates, we are in for a stronger-than-usual winter season.
Interest rate news
The Reserve Bank of Australia (RBA) decided to keep the official cash rate unchanged at 0.10 per cent at its meeting on 1 June. This decision is in line with the RBA’s position on leaving rates unchanged until 2024.
RBA Governor Dr Phillip Lowe stated that the board decided to maintain current policy settings. This included the yield on the 3-year Australian Government bond, targets of 10 basis points for the cash rate, parameters of the government bond purchase program, and the rate of zero per cent on Exchange Settlement Balances.
Mr Lowe said “The board is committed to maintaining highly supportive monetary conditions to support a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2.0 to 3.0 per cent target range.”
The date for final drawings under the Term Funding Facility is 30 June 2021. The facility is supporting low borrowing costs until 2024 through low-cost fixed rate funding for three years. “Given that financial markets in Australia are operating well, the Board is not considering a further extension of this facility,” stated Mr Lowe.
At the July meeting, the board will consider whether to retain the April 2024 bond as the target bond for the 3-year yield target or to shift to the next maturity, the November 2024 bond. The board will also consider future bond purchases following the second $100 billion of purchases under the government bond purchase program in September.