It left the cash rate at a record 0.1% for February.
The RBA’s move comes amid speculation that higher interest rates will come sooner rather than later – especially after December’s unemployment rate of 4.2% was released.
Acknowledging that the unemployment rate is the lowest the country has seen since August 2008, Bluestone’s Dr. Andrew Wilson was quick to point out that it does not necessarily reflect a “stable” economy.
“The low rate unsurprisingly fueled the usual suspects’ predictions of a surge in wage growth fueling higher inflation and leading to RBA interest rate hikes this year,” he said.
Explaining that the national result was again significantly influenced by the recoveries of New South Wales and Victoria from the severe COVID shutdowns of previous months, Dr Wilson said the short-term outlook for the national labor market are anything but certain – and we have Omicron to blame.
And with the RBA recently doubling down on its expressed intention not to raise rates until national wage growth is “significantly higher than it is now”, Dr Wilson believes that “forecasts official interest rate hikes as early as August are clearly absurd”.
Real Estate Institute of Australia (REIA) chairman Hayden Groves also doesn’t expect the RBA to make a move any time soon – citing the latest Consumer Price Index figures (CPI).
REB previously reported that the CPI increase for all groups of 1.3% for the December quarter and 3.5% for the year points to relatively stable monetary parameters for the rest of 2022, according to Mr Groves.
“While the rise in analytical series is the highest in over six years, it remains within the RBA’s long-term target rate of 2-3%,” he said.
The president said: “This suggests that there will be no immediate interest rate pressures.”
Real estate is a type of real property that refers to any land and its permanent improvement or accompanying structures, whether natural or man-made.