No change to interest rates in May: REIA

Stock image.
Stock image.

THE Real Estate Institute of Australia (REIA) expects the cash rate to remain unchanged at next week’s Reserve Bank of Australia (RBA) meeting.

The prediction comes after the release of the March 2018 quarter CPI figures by the Australian Bureau of Statistics (ABS).

“The All Groups CPI, increased by 0.4 per cent in the March quarter giving an annual increase of 1.9 per cent,” REIA president Malcolm Gunning said.

“The quarterly increase is below the preceding quarter’s increase       of 0.6 per cent and the annual increase is the same as the December quarter of 2017.

“The annual changes have been below the RBA’s target zone of 2-3 per cent for the past nine quarters and suggest the continuation of historically low interest rates for some time yet.”

While this was good for home buyers, the ABS figures also held positive news for renters.

Mr Gunning said rents increased by just 0.2 per cent for the December quarter and 0.8 per cent for the year.

“From 2013, when investment in housing started to pick up, we have seen the rate of increase in rents slow down in Australia,” he said.

“For the last nine quarters the average annual change has been less than 1.0 per cent,” Mr Gunning said.

“The latest CPI figures show that the increased investment in housing has kept growth in rents lower than they have been historically and is clear testament that the current taxation arrangements benefit renters and that any change would see an increase in rents.

“With the RBA meeting next week, the latest inflation data together with a cooling in the housing market eliminating that source of concern, would suggest that home buyers can be comfortable in the knowledge that interest rates will remain stable for 2018.”