Steady inflation rate gives homeowners chance to upgrade
The Australian inflation rate is within the Reserve Bank of Australia (RBA) target, spelling good news for homeowners and first home buyers.
Cheap home loans have been on offer to borrowers, given the RBA's decision to retain the official cash rate (OCR) at 2.5 per cent. The OCR has rested at 2.5 per cent since August 2013.
RBA Governor Glenn Stevens called the nation's monetary policy "accommodative" during the latest RBA board meeting. The OCR decision relates directly to the RBA's goals for the inflation rate.
Currently, the inflation target band is 2 to 3 per cent, according to an April 1 statement from Mr Stevens.
Recent figures from the Australian Bureau of Statistics show that inflation is within this target, spelling good news for those looking to buy a second property as an investment or upgrade from their current home.
The annual inflation rate to the March quarter was 2.9 per cent in seasonally adjusted terms, according to an April 23 release from the ABS.
The trimmed mean placed the inflation rate at 2.6 per cent over the same period. The weighted mean was 2.7 per cent.
With regards to quarterly inflation, the rate was 0.6 per cent in seasonally adjusted terms between the December and March quarter. For year-on-year inflation rates, it's clear that the most recent rate falls within the RBA's target of 2 to 3 per cent.
With inflation steady and mortgage rates consistently low given the current cash rate, conditions are certainly favourable for homeowners.
A mortgage refinance may be an option to snap up the most affordable loan products on offer, or to upgrade to a better property.