The Reserve Bank of Australia has decided to keep interest rates on hold for another month. The official cash rate is currently 4.5% and with confidence decreasing throughout the economy, some people are questioning whether a rate reduction is needed.
New home loan approvals are at the lowest level in almost a decade and there is strong evidence emerging that home prices may be already falling around the country. Demand for high-end, Luxury real estate has deceased sharply in the last quarter, as has auction clearance rates throughout Australia.
First home buyers have abandoned the market in droves and the number of buyers attending open homes has decreased sharply. Indicators appear to show that interest rate increases have slowed the economy and decreased confidence. Some economists are predicting flat or negative price growth for the remainder of 2010.