Will we finally see interest rates change in June?

The Reserve Bank of Australia has kept the official cash rate of 1.5 per cent on hold since August 2016, meaning that it’s been 30 months since we have seen any movement, but there is a growing chance that we will see interest rates change soon.

RBA Governor Philip Lowe hinted as much last week when he pointed out that growing unemployment and weak wage growth would benefit from a lower cash rate.

“A lower cash rate would support employment growth and bring forward the time when inflation is consistent with the target,” Dr Lowe said in an address to the Economic Society of Australia in Brisbane.

“Given this assessment, at our meeting in two weeks’ time, we will consider the case for lower interest rates,” he said.

While a lower cash rate is a sign of a weakening economy, there’s little doubt that it would provide a much-needed boost to the property market.

Lower interest rates, combined with the recent regulatory easing of mortgage stress tests will make it much easier for buyers to take out home loans and get their foot on the property ladder.

Whether we will see a rate cut at the RBA’s meeting on June 4 (and whether the banks would follow suit) remans to be seen, but if we don’t see a June cut it’s looking increasingly likely that we could see a rate cut soon. Watch this space!

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