Australia's interest rate has to be the most talked about subject in the country! And everybody has a view. Home buyers and property investors are happy if it remains unchanged, or goes down; those with term deposits and savings want it to go up, and the major banks, it seems, will do whatever they want anyway!
At its meeting on April 5, the Reserve Bank of Australia decided to leave the cash rate unchanged at 2.0%.
Governor: Monetary Policy Decision, Glenn Stevens, said the global economy appeared to be continuing to grow, and commodity prices had generally increased lately.
Inflation is low
"In Australia, the available information suggests that the economy is continuing to rebalance following the mining investment boom," Mr Stevens said.
"Consistent with developments in the labour market, overall GDP growth picked up over 2015, despite the contraction in mining investment. The pace of lending to businesses has also picked up.
"Inflation is quite low. Recent information has confirmed that growth in labour costs remains quite subdued. Given this, and with inflation also restrained elsewhere in the world, inflation in Australia is likely to remain low over the next year or two.
Low interest rates
"Given these conditions, it is appropriate for monetary policy to be accommodative. Low interest rates are supporting demand, while supervisory measures are working to emphasise prudent lending standards and so to contain risks in the housing market."
All good, right? Well, maybe not. Despite the RBA making no changes, major Australian banks look likely to put up interest rates for homeowners and investors, following the lead of the Bank of Queensland.
Despite announcing an increase in profit, BOQ - and other banks - have been complaining for months about higher funding costs.
BOQ leads Big 4
It is also very unusual for a regional bank to lead the Big 4 on repricing, a move which has surprised and angered BOQ customers.
This, in turn, is putting more pressure on the RBA. If all the banks follow BOQ's lead, the RBA may be forced to counteract the move by further cutting the official cash rate to a new record low.
So, what does all this mean for those buying property at the moment? Well, unless you are with the Bank of Queensland, nothing much right now. But you'll need to watch what your bank does over the coming weeks.
At 2.0%, the cash rate is very attractive to property buyers, which is equally good news for those selling property. It also means vendors can upgrade to something bigger or better if they wish.
And although debate over the future of negative gearing continues, a low interest rate also encourages investors, as the gap between incoming rent and outgoing mortgage repayments is smaller.
According to the experts, 2016 will be a good year, whether you are buying or selling. It's an excellent year for first home buyers and, will a reduction in new builds, a good time to sell. There will also be renewed interest in buying holiday homes and rental properties.
And, remember, if you don't like what your bank is doing, you can always change banks!