"Townsville Real Estate Blog reported in its article
"Boom or Bust? Convergence of Factors Impacting Townsville Real Estate
Market, August 2014 that low interest rates are strength to the local real
estate market. It is one of the top ten reasons for creating positive demand in
the real estate market", Rapid Realty Principal, Mr McLeod said.
Today, The Reserve Bank backed up the prediction of most
economists by leaving the official cash rate at a record-low 2.5 per cent for
the 13th consecutive month.
Reserve Bank Governor, Glenn Stevens said; "In the
Board's judgement, monetary policy is appropriately configured to foster
sustainable growth in demand and inflation outcomes consistent with the target.
On present indications, the most prudent course is likely to be a period of
stability in interest rates."
ANZ chief economist Warren Hogan said the economy had been
playing out as expected, with housing doing well and the gradual transition to
a non-mining recovery on track.
He also said the Reserve Bank would have derived no benefit
from lowering rates because it would have squandered an option “that would be
better used if a major problem emerges”.
Commonwealth Bank chief economist Michael Blythe said the
Reserve Bank would start a “modest tightening cycle” in February that would
eventually lift rates to a ‘neutral’ 3.5 per cent.
Peter Munckton from Bank of Queensland said the Reserve Bank
was likely to keep rates on hold for the rest of 2014/2015, but that it would
most likely cut further if it did make a change. “The bar for another rate cut is quite high and would
require the currency to remain around current levels, the unemployment rate to
rise further and momentum in the non-mining economy to stay modest,” he added.
"The Reserve Back decision today to keep rates on hold at .25 percent is critical for the Townsville economy to continue the path of recovery in demand and price growth moving forward.", Mr McLeod commented.
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