Australia’s official cash interest rate is unlikely to dip under its current record low when the board of the Reserve Bank of Australia meets today according to a survey of leading economists and financial observers.
In the latest monthly Reserve Bank Survey, conducted by finder.com.au, all 33 respondents believe the RBA will leave the cash rate on hold at 2%.
A common sentiment among numerous respondents was that the RBA would sit pat due to the fact that May’s rate cut has so far done little to impact the economy.
The improved unemployment rate, higher housing costs as well as financial pressures from overseas were other factors cited by respondents as to why the RBA would leave the rate untouched.
While respondents were unanimous in believing the rate will remain unchanged today, more than half are expecting the cash rate to start rising next year, while 13 analysts believe the cash rate will increase after 2016. The average forecast for when the cash rate will rise is the last quarter of 2016.
Two respondents believe the cash rate will increase this year.
RELATED: Bookies say no change a "near certainty"
Nearly 40% of respondents are expecting the cash rate to fall by the end of the year, and that it could start dropping as early as next month.
Of those who expect the cash rate will fall this year, five are expecting a drop in August or September while the remaining seven are expecting to see the cash rate fall in the last quarter of 2015.
Almost four out of five analysts (79% or 26 experts) believe house prices will continue to rise this year, while one expects house prices may start to fall.
“The Reserve Bank is in between a rock and a hard place on this now with a weak economy and property prices starting to bubble in some areas. Ideally it needs the currency to do the work for it, but this is remaining stubbornly strong,” Mark Brimble, associate professor of finance at Griffith
“This continued uncertainty in Europe and Asia and expectations of a rate rise in the US later this calendar year, the Reserve Bank is likely to sit on its hands. Regarding house prices, the property market will continue to behave unevenly across the country. Some areas will continue to rise, while others will fall dramatically as employment (and thus demand) shifts.”
Do you have more than $120k in your super fund? You could use your super to buy property - Find out how
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out