Interest rates remain unchanged encouraging buyers and sellers

The Reserve Bank's decision last Tuesday to keep interest rates on hold for another month is a reprieve for the property market and good news for both buyers and sellers. The announcement surprised most of the market, which expected another quarter per cent rise based on strong employment, solid June quarter economic growth numbers and what seemed like a much more urgent attitude from the RBA in recent speeches.

The major banks expected a rise as well, as there was a concerted campaign in the week leading up to the RBA decision informing us that the banks were struggling under increased funding costs and likely to lift mortgage rates above official movements. Since the decision by the RBA, the major banks have largely ruled out any increase this time around, delaying any move on rates until next month.

The effect of the decision not to raise rates now has increased the likelihood the official cash rate may not rise until next year, particularly if September-quarter inflation figures, to be published later this month, keep the underlying annual inflation rate within the RBA's target range of 2 per cent to 3 per cent.

This is a positive for sellers with properties on the market in October. We've now had five months with no movement on rates, giving buyers confidence that consecutive rate rises, as experienced up until May this year, are not the new norm.

After a quiet auction market last weekend, largely due to the NRL grand final, there are more than 1000 properties listed for auction over the next two Saturdays. This number is likely to rise throughout the month.