Steady growth in employment, as well as further signs of a recovery in Sydney and Melbourne’s established housing markets, are reasons why the Reserve Bank has chosen to hold interest rates for now. The change would allow time to absorb recent cash rate cuts into the economy.
Data from the Australian Bureau of Statistics revealed Employment increased by 20,200 to 12,942,800 people. Full-time employment increased by 9,000 to 8,840,200 people and part-time employment increased by 11,300 to 4,102,600 people. Unemployment increased by 1,600 to 718,000 people. The unemployment rate remained steady at 5.3%. The statistics show that the unemployment rate fell to 5.2% in September. While the rate has remained steady at around 5.25% over recent months, it is expected to remain around this level for some time, before gradually declining to a little below 5% in 2021.
In other positive news, Chief Executive Officer of Mortgage Choice, Susan Mitchell says: “The property market continues on its road to recovery, with the CoreLogic Hedonic Home Value index revealing that national dwelling values rose for the fourth consecutive month in October. The growth, which until recently had been limited to Sydney and Melbourne, was more widespread over October with seven of the eight capital cities recording gains”.
“My advice to borrowers would be to make an appointment to speak to your local mortgage broker and find out what your options are, especially if you’ve been in the same home loan for more than two years. If you can access a lower interest rate, you might want to consider keeping your repayments at the same rate and pay off your home loan sooner,” concluded Ms. Mitchell.