At its latest meeting for September, the Reserve Bank of Australia (RBA) found it prudent to leave the cash rate steady at 2.5 per cent - the lowest it has been since 1959.
This is an encouraging result for anyone who has plans to purchase real estate in Australia in the near-term, as it means that many will still have the ability to secure housing finance at an attractive rate.
In a statement, the RBA stated that the board made its decision based on the slow economic growth that has been present in Australian markets over the last few months.
This has been attributed to the slowdown in mining investments, which the economy is still gradually adjusting to over time.
September's cash rate decision has been welcomed by the Real Estate Institute of Australia (REIA), with President Peter Bushby stating it was the right decision due to the federal election being only days away.
"Keeping interest rates low is essential not only for encouraging first home buyers into the market but it's vital to further stimulate building activity and provide new jobs in the housing industry," said Mr Bushby in a September 3 statement.
In a September 3 article from the Australian Associated Press (AAP), JP Morgan Chief Economist Tom Walters said that there would be "no way" the RBA would make another cash rate reduction so close to the date of the federal election.
"One rate cut early in the election campaign was easily explained - two would be unnecessarily bold, and could be perceived, wrongly and mischievously, as the RBA providing tacit support to the ruling Labor Party," Mr Walters said in the AAP article.
This poses questions as to whether there may be a further interest cut at some point this year, especially if the demand for another cut strengthens and the rate of inflation continues to grow.
RBA Governor Glenn Stevens said in a September 3 statement that the board will "continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target".
Mr Stevens stated that since the easing of monetary policy in 2011, there has been some support for interest-sensitive spending and asset values. There has also been some increased demand for finance by Australian households, suggesting that people are becoming more comfortable and confident with their money.
