There were many who predicted a rate cut in February towards the end of last year, but this decision to hold came as no surprise to most.

Keeping rates on hold is a smart move by the RBA under the current economic circumstances.

This decision should keep the property market strong and help keep APRA on the sidelines (who will be watching very, very closely to see how hot the market gets during 2020).

The ABC reported earlier today,

The Reserve Bank has left interest rates on hold at its first meeting of the year, despite the economic fallout from Australia's bushfires and China's coronavirus outbreak.
The RBA's cash rate remains at a record low 0.75 per cent, where it has been since the last 25-basis-point cut in October.

In a recent interview, Australian Real Estate Prediction 2020, Louis Christopher of SQM Research spelt out how any further rate cut could bring APRA off the sidelines earlier and today’s decision has hopefully gone a long way towards letting the growth in the property market run its course during 2020. His prediction is definitely worth tuning into if you’re interested in seeing a detailed insight into the Australian Property Market.

In spite of the economic disruption caused by the bushfires already, many indicators have been slightly better than expected, with a small fall in unemployment and a slight increase in inflation in the latest ABS data.
However, markets are still anticipating a rate cut soon, with March seen as a 50/50 prospect, while traders are pricing in a two-thirds chance of interest rates being at 0.5 per cent or lower after April's RBA meeting.
The Reserve Bank's governor, Philip Lowe, did nothing to disabuse them of this view, although his post-meeting statement did hint that the Reserve Bank was not in any rush to cut.
"Due to both global and domestic factors, it is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target," Mr Lowe said.
"The board will continue to monitor developments carefully, including in the labour market.

For more on today’s decision by the RBA, visit…

Regards

Greg Vincent