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Interest rates look set to stay on hold when the Reserve Bank meets today, but forecasters say there’s a possibility of at least one further rate cut in the remaining months of 2013.
Westpac chief economist Bill Evans said it was clear the RBA has no intention to adjust rates in September because of its proximity to the election.
“However the minutes indicate that the board is of the mind that it is still considering decisions with a view to reducing rates further,” he said.
“Our forecast is that two more cuts can be expected in this cycle in November and February next year.”
November or December are seen as the most likely timing for the next 0.25% reduction in interest rates to a record low of 2.25%.
Interest rates have been reduced eight times to a record low of 2.5% since this cutting cycle began in November 2011.
This has knocked an estimated $450 off the monthly repayments on the average mortgage.
Professionals CEO, Ted Piteo, used the pending interest rate announcement to remind people that cuts in interest rates were not great news for everyone. “Retirees relying on term deposit savings or interest-bearing accounts for income will have noticed an ever-decreasing amount of cash credited from these deposits,” he said.
The good news is, it is a good time to consider property investment as a means for building future wealth, with property at very affordable levels in South Australia and some excellent investment opportunities on the market.
“Over the long term, there are substantial benefits to property investment. Speak with any of our Professionals sales or property management team and they’ll be glad to discuss the options.”