The official cash rate will remain at a record-low 2.5 per cent “for the next year at least”, according to the Reserve Bank of Australia.

The cash rate has been at 2.5 per cent for 13 months after the Reserve Bank again chose not to act at its monthly meeting on September 2.

According to the minutes from the meeting, which were released yesterday, board members agreed that Australian banks were continuing to raise funds relatively cheaply.

“Reflecting lower funding costs and competitive pressures, rates on Australian intermediaries’ housing loans continued to edge down in August,” the minutes said.

“The average interest rate on all outstanding housing loans had fallen by around 15 basis points since the cash rate was reduced in August 2013.

“Members concluded their discussion of financial markets by noting that market pricing was for the cash rate to be unchanged at the September meeting and for the next year at least.”

The board also agreed there had not been a fall in mortgage lending standards and policies, despite the improved wholesale funding conditions driving an increase in competition.

“Members further observed that additional speculative demand could amplify the property price cycle and increase the potential for property prices to fall later,” the minutes said.

“The main risks in such a scenario would likely be to the stability of the macro-economy rather than the financial system, particularly if households were to react to declines in their wealth by cutting back on their spending.”

These risks require “ongoing close observation”, according to the board.

With talk of overheated housing markets in both Sydney and Melbourne, east coast speculation has turned to when the apparent housing ‘bubble’ can be expected to burst.

The Reserve Bank’s announcement this week that interest rates would again be put on hold, means that the already hot east coast markets will probably not simmer down any time soon, which is great for those already in the market but a headache for others looking to wade in for the first time.

Although no one is willing to speculate on how long this current surge is likely to last, history tells us that where there are highs, lows are almost certainly certain to follow as they did here following the heady days of the peak in 2009.

Although the Perth market has not experienced the rapid rises that Melbourne and Sydney have experienced in the last two years, with growth on the east coast recorded at around 16 per cent over the twenty four month period, it has come back and is recording steady, if not spectacular rises.

No one, not even hardened industry veterans can predict what property markets will do with absolute certainty, but it does pay to do your research before you make the move either as a first home owner, an existing one looking to upgrade, or an investor looking for strong rental returns or long term capital growth.

It’s important to get advice from those in the area who know the ins and outs of the market you’re searching in and who have ‘on the ground’ advice about what property prices are doing in your local area.

For a comprehensive update or even an informal discussion about market fluctuations, recent sales in your area and a look at comparative properties currently on the market, give me a call and I’m happy to come and have a chat and let you know what your property might be worth and the best time to go to market.