Fresh look at the Reserve Bank rate decision and what it means for first home buyers

Earlier this afternoon the Reserve Bank of Australia (RBA) board opted to leave the cash rate on hold (yet again), at a record low of just 1.50%. We explore RBA’s reasoning for the decision by dissecting RBA Governor Philip Lowe’s official media statement released at 2:30pm AEST today in a new look format below.

Source: RBA
Source: RBA

RBA on the Economy

  • “The recent data has been consistent with the Bank’s expectation that growth in the Australian economy will gradually pick up over the coming year”.
  • “The decline in mining investment will soon run its course”.
  • “The outlook for non-mining investment has improved recently and reported business conditions are at a high level”.
  • “Residential construction activity remains at a high level, but little further growth is expected”.
  • “Retails sales have picked up recently, although slow growth in real wages and high level of household debt are likely to constrain future growth in spending”.

RBA on Employment

  • “Employment growth has been stronger over recent months and has increased in all states. The various forward-looking indicators point to continued growth in employment over the period ahead. The unemployment rate is expected to decline a little over the next couple of years”.
  • However, “wage growth remains low. This is likely to continue for a while yet, although stronger conditions in the labour market should see some lift in wages growth over time”.

RBA on Inflation

  •  “Inflation remains low and is expected to pick up gradually as the economy strengthens”.

RBA on the Property Market

  • “Conditions in the housing market continue to vary considerably around the country. Housing prices have been rising briskly in some markets, although there are signs that conditions are easing, especially in Sydney. In some other markets, prices are declining”.
  • “In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years”.
  • “Rent increases remain low in most cities”.
  • “Investors in residential property are facing higher interest rates. There has also been some tightening of credit conditions following supervisory measures to address the risks associated with high and rising levels of household indebtedness. Growth in housing debt has been outpacing the slow growth in household incomes”.

Compare current home loan rates here

I’m about to be in the market for a home loan

  • If you are getting close to buying your first home why not check out this easy to use home loan comparison table to see a range of rates currently on offer.
  • Getting ultra close? We recommend you arrange an appointment with an FHBA Lending Adviser who can discuss your circumstances, help you determine your borrowing capacity, showcase home loan options you may be eligible for and go through the home loan process with you. For more on FHBA Mortgages please click here.

Speak with a FHBA Lending Adviser to work out your first home loan

I’m still saving for a home deposit

Unfortunately, the rate of interest on savings accounts are relatively low at the moment. But when saving for a home deposit, every bit counts. See if you can give your savings a boost by checking out these free & easy to use saving accounts comparison tables!

Compare deposit savings accounts

I want to know more about the RBA decision

To read the full RBA statement from the September board meeting please click here. 

Did you know?

Did you know that you can protect yourself from a rate rise as a mortgage borrower? A fixed rate home loan allows you to lock in an interest rate for a period of time, such as 1 year – 5 years. This gives borrowers certainty around home loan repayments. So how do you choose whether to get a fixed rate home loan or the more common variable rate home loan? Click here to learn more about your home loan options.

The next RBA board meeting 

The next RBA board meeting will be held on Tuesday the 3rd of October 2017

Spring property market begins

This week is the official start to the Spring property market. Be informed – see our preview of the Spring property market.

Written By,

First Home Buyers Australia

Not sure whether you have saved enough to enter the property market? Try our FHBA Deposit Estimator for free!


First Home Buyers Australia
First Home Buyers Australia

Australia’s leading organisation specialising in assisting first home buyers achieve the great Australian dream of property ownership.