The Reserve Bank of Australia (RBA) has given its strongest indication yet that interest rates will be left unchanged for a few more months.
In an address to the House of Representatives Standing Committee on Economics, RBA governor Glenn Stevens lauded the improving Australian economy, saying that there is some interest rate stimulus yet to be done, and at the last RBA meeting, the board decided to see how it played out.
Mr Stevens explained how over 16 months, rates had fallen by 175 basis points - a result that has benefited many homeowners.
He explained: "Allowing for some change in the gap between the cash rate and other rates, lending rates nonetheless have fallen to be not far from their historic lows.
"The share of household income devoted to interest payments has likewise declined considerably. Indeed housing 'affordability' as conventionally measured, for purchasers, has improved a lot over the past two years."
Mr Stevens explained that property investment could become more prevalent, as low interest rates, steadily rising real estate values, rising population, and strong gross rental yields are all providing an impetus for investment.
He compared this to business investment, which appears to be quite subdued.
