The Reserve Bank of Australia (RBA) announced it has decided to keep the official cash rate unchanged at 0.25% at its meeting on the 2nd June 2020.
According to the RBA, the pace of recovery for the quarter beyond June is uncertain. The outlook will depend on the extent to which the market continues to be affected by social distancing and other containment restrictions. RBA governor Philip Lowe said in the previous meeting that the Board will not increase the cash rate until progress is being made towards full employment and inflation is sustainably within the 2-3 per cent target band.
Interest rates have remained low for some time now and there are plenty of competitive home and property investment loans available. Talk to Fornaro to make sure you’re getting the right deal for you.
We have seen a reduction in home values in May 2020, however the market activity showed more positive signs. The Home Value Index report from CoreLogic shows that the estimate of sales activity bounced back by 18.5% in May 2020 after a drop of 33% in April 2020. CoreLogic Head of Research, Tim Lawless, said “Considering the weak economic conditions associated with the pandemic, a fall of less than half a percent in housing values over the month shows the market has remained resilient to a material correction. With restrictive policies being progressively lifted or relaxed, the downwards trajectory of housing values could be milder than first expected.”
Melbourne’s housing market has posted the largest fall over the month, down at -0.9% May 2020. Home values were also down in Sydney (-0.42%), Brisbane (-0.08%), Perth (-0.56%) and Darwin (-1.59%), but rose in Canberra (+0.55%), Hobart (+0.77%) and Adelaide (+0.45%).
* Monthly Home Values figures as at 31 May 2020
* Australian auction results, clearance rates and recent sales for the week ending 31 May 2020. The clearance rate is preliminary and current as at 10:00am, 1 June 2020.
While the immediate indicators are showing improvements, the longer-term outlook of the housing market remains uncertain. With property prices easing you might have plans to take this opportunity to explore new property options. If you’re a business owner, you might also take this chance to take advantage of the increased instant asset write off threshold for assets up to $150,000, so please contact us you require assistance with getting your finance organised.