RBA leaves cash rate on hold for record 18th meeting


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The RBA today held the cash rate at 1.5% for a record 18th straight meeting.

Housing market conditions are likely to be moving further down the RBA's list of priorities, considering the market is showing every sign of moving through a soft landing, with the pace of value decline easing over recent months.

The controlled slowdown in the housing sector is likely to be a welcome outcome from the RBA, who are more likely to be focussing on labour markets, where the rate of unemployment, although lower than a year ago, crept higher, from 5.4% to 5.5% in February.

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With some slack in labour markets, wages growth remains close to record lows, which is keeping a lid on inflation and household consumption.

National dwelling values were flat last month, however six of the eight capital cities saw dwelling values slip lower in March, albeit at a reduced rate of decline relative to other months.

Despite the hold decision from the RBA, mortgage rates remain close to historic lows, particularly for owner occupiers who are paying down both their interest and principal.

Investors are facing a mortgage rate premium of around 60 basis points, but relative to long term averages, their mortgage rates are low.

While the RBA has flagged the next move in interest rates will be a rise, it remains likely that any hike to the cash rate is well in the future.

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Tim Lawless is head of research at CoreLogic Asia Pacific.