July 4, 2016: The cash rate is expected to remain on hold at 1.75 per cent when the Reserve Bank board meets for its July review tomorrow, despite growing pressure for a second rate cut this year.
A RateCity.com.au analysis of over 30 key economic indicators suggests that the RBA will continue its wait-and-see approach with the Federal Election results still up in the air and the fallout from the Brexit yet to filter through properly.
Peter Arnold, data insights director at RateCity.com.au, said the RBA is unlikely to jump in without seeing how it all plays out.
“With the election still too close to call, the RBA will want to see how the nation and the government settle in before making a move,” he said.
“While the dust settles on last month's unexpected Brexit vote, leaving the world economy in tatters, the RBA is unlikely to act without seeing the full implications.”
However, mortgage holders shouldn’t be disappointed if the cash rate remains steady in July, as the banks have been taking matters into their own hands in recent weeks, Arnold added.
“Almost 180 fixed home loan rates were slashed in the last month, suggesting that there is at least one more rate cut to come this year, but the RBA is likely to hold it for another day,” he said.The property market in Australia's capital cities continues to show strong activity.
Melbourne real estate guru, Jeff Grochowski, of Accrue Real Estate in South Melbourne said today " We see strong demand for inner suburban apartment buildings that are well priced and within proximity to schools, transport and shops. For the construction industry to continue to employ thousands of people, we need the new government to continue with policies that encourage investors to borrow. Low interest rates are certainly a driver of the current demand."
