RBA rate rise a sound decision for economic sustainability

Harcourts Managing Director Mike Green has applauded the Reserve Bank of Australia’s (RBA) decision to increase official rates by 0.25 per cent.

“During the last 12 months we have seen the RBA act cautiously, which allowed market growth to gain its momentum before the RBA took further action. This is a very sensible approach in my opinion,” Mr Green said.

“Harcourts has seen a steady market, with figures across the Harcourts Group in February of this year reflecting a twelve per cent increase on February 2009.

“While this percentage increase isn’t large, it’s steady, which indicates a market that is ready for a minor increase like this rise of 25 base points,” he said.

“And interest rates are still very low compared to historical numbers, so I consider a cash rate of four per cent to be extremely favourable,” he said.

“We must bear in mind the Australian economy has performed well during the last two years in comparison with other countries.”

This is evident by Treasurer Wayne Swan’s statement yesterday, providing “further evidence that a self-sustaining private sector recovery is starting to take hold.”

This announcement was off the back of the Australian Bureau of Statistic’s data released just yesterday, highlighting Australia’s growth in 2009 with the economy up 2.7 per cent, which makes us one of the strongest advanced economies in the world.

“2008 and 2009 have people acting far more cautiously than they did before, and many live in fear of a second economic plunge.

“The RBA however acted based on statistical fact, rather than being led by trending emotions.

“In tandem with our economic growth rate, our unemployment rate is still sitting at a low 5.3 per cent and retail sales figures are surprising us each month,” he said.

“In addition, RP Data Rismark just released their latest report, which shows solid growth in the property market across the nation.”

“I believe this minor rise will ensure our economic growth is sustainable, rather than letting it perhaps escape our control once again.”