Home buying opportunities remain strong

Home buying opportunities remain strong

The Reserve Bank of Australia (RBA) has elected to retain the low 2.5 per cent cash rate for another month, which will likely lead to further affordable home mortgages.

RBA Governor Glenn Stevens gave multiple reasons for keeping the cash rate at this low figure, not least because of the "strong expansion" in the nation's housing construction.

It's anticipated that this will continue, although resource sector investment spending is set to decline.

"There has been some improvement in indicators for the labour market in recent months, but it will probably be some time yet before unemployment declines consistently. Recent data confirm that growth in wages has declined noticeably," explained Mr Stevens.

"If these and other domestic costs remain contained, inflation should remain consistent with the target over the next one to two years, even with lower levels of the exchange rate."

However, the existing monetary policy is geared appropriately to help growth over time, Mr Stevens explained.

The Housing Industry Association (HIA) noted the decision to hold the rate at 2.5 per cent was hardly surprising.

"A shining light for the Australian economy is the recovery in new residential construction activity," explained HIA Chief Economist Harley Dale.

"It is encouraging that today the Bank confirmed the message that interest rates are on hold for a considerable period of time. A period of stability will maintain a positive environment for residential construction activity to boost economic growth throughout 2014 and into next year."

With further economic growth tipped and cheap home loans set to be on the horizon for some time, now may certainly be the time to buy.

There's a loan that's right for every type of buyer, whether additional features are required or not. For current homeowners, existing equity in their properties will make home buying that much more viable.

Image credit: FreeImages.com/Viktors Kozers 

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