UBS: Australian Mortgage Rates Will Hold At A Record Low This Year

UBS economists are expecting Australian mortgage rates to hold at a record low of 5 per cent throughout 2014, as unemployment keeps the RBA cash rate down.

In a note to clients today, Scott Haslem, George Tharenou and Delian Entchev raised their house price growth forecasts from 5 per cent to 7 per cent for the year, as the RBA balances weak unemployment and strong inflation numbers.

House prices rose about 10 per cent in 2013.

From the report:

UBS’ forecast of 7 per cent house price growth outstrips recent estimates from Fitch and RP Data by a significant margin.

Fitch pegged 2014 house price growth at 4 per cent earlier this week, with prices most likely to rise in Sydney, Melbourne and Perth, while RP Data CEO Cameron Kusher said prices would rise 5 per cent through the year.

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