Inflation figures likely good news for investors and home owners ahead of RBA interest rate decision

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The head of one of Australia’s peak real estate groups said there are signs that home owners and investors will continue to enjoy relatively low interest rates.

According to Neville Sanders, president of the Real Estate Institute of Australia, the latest Consumer Price Index figures show that inflationary pressures remain within the threshold set by the Reserve Bank of Australia (RBA), which is likely to be good news for borrowers.

“In the September quarter, the CPI rose by 0.5 per cent and an annual rate of 1.5 per cent,” Sanders said.

“These figures are well below the RBA’s target zone of two to three per cent and should ease any pressure on the interest rate outlook,” he said.

The board of the RBA is set to meet tomorrow to decide on the direction of Australia’s current official cash rate, with many having tipped that the meeting will result in a rate cut.

Sanders said that possibility has increased in recent weeks with figures showing rents are increasing at a slow pace, while house price growth is moderating in a number of markets.

“The impact of increased investor activity in the housing sector is flowing through to lower increases in rents,” Sanders said.

“With inflation under control and a moderating housing market, home buyers can expect a stable outlook with the possibility of a further interest rate cut,” Sanders said. 
 
 

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