Thomas Merriman

There seems to be a mixed view of the RBA’s choice to keep the official cash rate on hold at 2% after the meeting earlier this week (2nd February).
While a lower interest rate would spark commentary about a damaged economy in need of support, a raised rate would be taken poorly by the capital investment sector leaving the cash investors rejoicing.

The interesting thing, when researching, is that the market expectation of a rate decrease in late November, December and January was around or below 10% while as of yesterday the expectations were up at 21%, in support of a decrease to 1.75%.

There is already speculation that certain sectors of the housing market will see a decline in 2016, namely the apartment market, and specifically in Sydney. However, popularity in the security of bricks & mortar seems to be growing in spite of negative chatter.

Thomas Merriman.