Investors and homeowners can continue to enjoy historically low interest rates, with the Reserve Bank of Australia (RBA) keeping rates on hold again

The Real Estate Institute of New South Wales president Malcolm Gunning says the RBA made the correct decision to keep the cash rate at 2.5 per cent.

“We’re heading into the spring auction season, which has been boosted by the RBA’s decision to keep rates on hold,” he says.

“September, with its warmer weather and good lead-in time to exchange before Christmas, is traditionally the most popular time of the year to secure a property.”

The official cash rate has now fallen 225 basis points since November 2011, with the RBA cutting interest rates twice in 2013 in May and August.

“We must once again caution those seeking to take out a mortgage to ensure they they’re realistic with their abilities to service debt,” Gunning warns.

“Interest rates won’t remain at these record lows and future interest rate increases must be factored in.”

RP Data research director Tim Lawless adds there’s been a 4.2 per cent rise in dwelling values across the combined capitals over the three months of winter, indicating that growth rates across the housing market have seen a rebound since the softer readings in April and May. 

“While the rate of capital gains has been demonstrably high, growth in dwelling values has been very much concentrated within the Sydney and Melbourne markets, with every other city recording a much more sustainable pace of growth,” he says.

“If higher home values were accompanied by a relaxation in lending standards that would definitely be cause for concern, however recent APRA data showed that the banking sector has reduced their proportion of high loan to value ratio lending over the June quarter. 

“With this week marking the beginning of Spring, the housing market will come under increased scrutiny to see if the seasonal surge in spring listing numbers is accompanied by an uplift in mortgage demand and buyer numbers. The latest indicators show that vendors remain firmly in the driver’s seat, with auction clearance rates averaging in the high 60 per cent to low 70 per cent range week on week and private treaty sales continuing to show a reasonably rapid pace of sale.”