Cast your mind back to September 2019 and the cash rate was at an all time low of 1%, then in October 2019 it dropped to 0.75% to ward off the downside tilt…and that was all before that 5 letter C word entered the scene in 2020…on 4 March it dropped to 0.5% then on 20 March it hit 0.25% and last month (November 2020 the cash rate hit an astounding 0.1%)…so we might be showing our age here but does anyone remember 30 years ago when the cash rate at 17%! That was certainly more challenging to realise the values of property investment in that market!
According to the RBA board it is unlikely that the cash rate will increase in the next 3 years, we have noticed that the RBA keeps saying that they won’t increase the cash rate until inflation is sustainability in the 2-3% range. Interesting to note that detached housing approvals just hit their highest volume in 20 years, with nearly 11,000 new detached houses receiving building approval across Australia in October 2020. Most commentators are attributing this to the trifold impact of HomeBuilder, record low interest rates and relaxed lending laws.