The honeymoon is set to continue for mortgage holders with interest rates unlikely to rise until 2024.
The RBA today left the official cash rate on hold at the historic low of 0.1 per cent where it has been since November.
That’s despite concerns about Australia’s booming housing market and better-than-expected unemployment figures last month.
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RBA Governor Philip Lowe said Australia’s economic recovery was going stronger than expected as shown in last month’s jobless rate.
The RBA acknowledged the strength in the housing market and says the board would monitor conditions.
But any further housing price boom will not be enough to see rates rise.
In a statement, Dr Lowe says rates would not rise until there is a substantial increase in wages growth and inflation.
“The recent CPI data confirmed that inflation pressures remain subdued in most parts of the Australian economy. A pick-up in inflation and wages growth is expected, but it is likely to be only gradual and modest,” Dr Lowe said.
“It (the RBA board) will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently.
“This is unlikely to be until 2024 at the earliest.”