The Reserve Bank of Australia has today announced the outcome of its board meeting.
As widely predicted, the RBA announced at 2.30pm today it will be keeping the cash rate on hold at 2.5 per cent.
The Reserve Bank Survey by comparison website Finder.com.au found that all 25 experts were correct that the cash rate would remain on hold today, with the vast majority expecting rates to start rising next year.
Just one of the 25 experts, Nicki Hutley from Urbis, is expecting the cash rate could rise by the end of this year or just after.
Finder.com.au money expert Michelle Hutchinson said that despite rates remaining at a record low for over a year, first-time buyerss are yet to be enticed back into the property market
"The proportion of first home buyers out of all home loans financed is among the lowest levels ever recorded,” Ms Hutchinson said.
“The latest figures show that first home buyer home loans made up just 13 percent of all home loans in June 2014,” she said.
"In fact, increasing house prices as well as the low supply for land available and fewer government incentives are pushing many first home buyers out of the market.”
Australian Property Monitors senior economist Dr Andrew Wilson believes rising unemployment could see the Reserve Bank cut the cash rate, which has been on hold since August last year.
“The predictions in the Budget were for unemployment to rise to 6.25 per cent over the next financial year and economic growth is set to remain well under trend at 2.5 per cent annually,” Dr Wilson said.
“These are conditions that reflect an economy that is continuing to shed jobs and certainly one that is not growing,” he said.
Even with rates already low at 2.5 per cent there is a chance of another cut, Dr Wilson said.
“Particularly with economies such as Brisbane, Hobart, Melbourne and Adelaide, with unemployment over 7 per cent it’s not really the environment to raise interest rates,” he said.
“If those unemployment rates continue to rise, particularly in Melbourne, there’s a case for cutting interest rates again.”