Interest rates on hold

At the reserve bank of Queensland’s meeting today, the board has voted to leave the cash rate unchanged for now at its low of 1.75%.

The RBA took into note commodity prices that are above recent lows, but follow very substantial declines over the past couple of years. This has also been accompanied by Australia’s loss in trade.

Recent data collected in Australia suggests an overall growth is continuing, despite declines in business investment. Areas such as domestic demand, as well as exports, have been expanding at a pace on par or above trend.

Inflation in Australia has been quite low. Subdued growth in labour costs and low pressure of cost elsewhere in the would the reserve bank expects this to remain the same for quite some time.

We have also seen some positive effects on the housing market because of the lower then average rates – increases in building approvals, higher rental yields and improving house prices. Unfortunately, low interest rates will not stay low forever. Investors should take this into consideration when making an investment to ensure they can afford a drop in income when rates begin to rise again, taking out a fixed rate loan will reduce this risk.