Reserve Bank of Australia leaves interest rates on hold for April 2021, borrowers expect early rise

The chilling reason almost HALF of Australia is expecting interest rates to rise soon despite promises they will remain on hold until 2024 – as Reserve Bank admits to house prices worries

• The Reserve Bank of Australia left interest rates on hold again at 0.1 per cent
• Governor Philip Lowe said the RBA would be monitoring ‘rising house prices’
• Canstar survey showed Australians expected interest rates to rise before 2024 
• More than one million home borrowers have never dealt with interest rate rise 

By Stephen Johnson, Economics Reporter For Daily Mail Australia

Published: 05:40 BST, 6 April 2021 | Updated: 05:50 BST, 6 April 2021

Almost half of Australia is expecting interest rates to rise before 2024 to stop a house price bubble, a survey shows.

The Reserve Bank of Australia on Tuesday left the cash rate on hold at a record low of 0.1 per cent but governor Philip Lowe has acknowledged rapidly rising house prices were a concern. 

‘Given the environment of rising housing prices and low interest rates, the bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained,’ he said.

The RBA has repeatedly vowed to them there until at least 2024, in a bid to reduce unemployment and push up inflation. 

Almost half of Australia is expecting interest rates to rise before 2024 to stop a house price bubble, a survey shows. Pictured is a house at Glenelg in Adelaide

Three of Australia’s big four banks are offering fixed mortgage rates of less than 2 per cent. 

Even if the Reserve Bank kept its promises to left rates on hold for three years, 40 per cent of adults surveyed by financial comparison group Canstar expected lenders to increase their mortgage rates before 2024.

A third of respondents expected the Reserve Bank to increase rates before 2024 to slow down runaway property price growth, with CoreLogic data for March showing Australian home prices had surged at the fastest monthly pace since October 1988.

Canstar’s group executive of financial services Steve Mickenbecker said the Reserve Bank or the Australian Prudential Regulation Authority, the banking regulator, would have to act sooner to stop a potential house price bubble. 

‘Pressure is going to start to build on the Reserve Bank and financial regulators to step in if we don’t see the property market start to slow in the next few months,’ he said.

The poll of 980 people found Australians to be optimistic about the economic recovery from Covid, with 42 per cent predicting sufficient growth by then.

The Reserve Bank hasn’t increased interest rates since November 2010, more than a decade ago. 

During that time,  1,005,661 first-home buyers have bought a house or an apartment to live in, RateCity calculated.

The Reserve Bank of Australia on Tuesday left the cash rate on hold at a record low of 0.1 per cent but governor Philip Lowe has acknowledged rapidly rising house prices were a concern

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