How can the March cash rate influence economic development in Moreland?

For the month of March, the Reserve Bank of Australia (RBA) has decided to keep the cash rate at 2 per cent – something that many will find unsurprising.

If you’re uninitiated, the cash rate is a figure set on a monthly basis by the RBA which often has a large influence on the interest rates set by the banks. This is a tool used by the government to guide economic movements, stimulating change where it’s needed.

While it can sound like another mysterious gear in the economy that is better left uncomprehended, it might be worth your attention if you’re moving to Melbourne. The historically low cash rate of 2 per cent can influence large-scale shifts like the wholesale rise in housing prices, to smaller economic developments in a local district – both of which can affect your real estate and career choices.

Low interest rates can open up a whole new set of possibilities, from buying a new house to finding a new job.

Moreland goals

In 2011, the Economic Development Branch of the Moreland council set goals to reach by the end of 2016. These include:

• Increasing work opportunities for residents and pushing the local employment ratio to 0.6.
• Boosting the economic production of businesses in the area and increasing the share of Gross Regional Product in northern Melbourne to 10 per cent.
• Growing high-quality investments made into public and private sectors. In quantifiable terms, the objective is to bump up Moreland’s share of capital investment in the inner city to 15 per cent.
• Pushing down the local unemployment rate below the average in urban Melbourne.

The 2 per cent cash rate plays a fundamental role in this by encouraging consumption and borrowing, which gets more money flowing into Moreland businesses. Furthermore, low interest rates encourage local companies to take out loans – something that is often key for small businesses to take the next step in their growth.

One of the strategic directions outlined by the Moreland council revolves around workforce development. As mentioned earlier, the low cash rate helps to create market conditions that are ideal for this. If you’re moving into the area and trying to start up your own company or are simply trying to find employment, these low interest rates work in your favour.

Are you a local worker trying to figure out where to live in Melbourne? Just get in touch with Nelson Alexander and we’ll help you find a home in a prospering suburb that is suited to your needs.