- September 13, 2021
- Posted by: Rogers Property Group
- Categories: Australian Property Market, Latest News
September 2021 Update – The Reserve Bank of Australia (RBA) has decided to keep the nation’s official cash rate unchanged at 0.10% as the country continues to battle the COVID-19 pandemic.
RBA Governor Philip Lowe noted in his monetary statement that the Delta outbreak has impacted large parts of the country and has interrupted the recovery of Australian economy including the associated restrictions on activity. Prior to Delta outbreak, there had been “considerable momentum”. However, Lowe is very optimistic and said the setback to the economic recovery is temporary and while the country continues to battle the Delta outbreak, it is only expected to delay but not derail the economic expansion. In fact, as vaccination rates increase and restrictions are eased throughout the nation, it is anticipated that the economy will bounce back sooner as expected. In order to aid economic recovery, the RBA will also buy government bonds at the rate of $4 billion a week and will continue to do so until mid-February 2022.
“GDP is expected to decline materially in the September quarter and the unemployment rate will move higher over coming months. While the outbreak is affecting most parts of the economy, the impact is uneven, with some areas facing very difficult conditions while others are continuing to grow strongly.”
Looking back at the interest rates two years ago, in September 2019, Australia’s interest rate was sitting at 1.0% and was dropped to 0.75% the following month. When COVID-19 pandemic hit the country last March 2020, the RBA made two emergency rate cuts to encourage more lenders, dropping the cash rate to 0.25%. Finally in November 2020, interest rates hit a historic low of 0.10%.
With interest rates remaining low for a long period of time to come and yields in certain areas very strong, it’s a great time to get into property investing.