Property

Mortgage broker calls RBA cuts 'too little, too late'

Kevin Farmer

A SURPRISE dip in home loan approvals highlights how the interest rate cuts by the Reserve Bank of Australia (RBA) have proven to be too little and too late to lift the Australian home finance market, according to mortgage broker network 1300HomeLoan.

1300HomeLoan managing director John Kolenda said the ABS housing finance figures for November, 2012, fell 0.5 per cent despite market expectations of a 0.5% rise.

He said the disappointing result came after the RBA kept its cash rate on hold in November before deciding to reduce it 25 basis points to 3% in December.

"The RBA has been messing around with the cash rate for the past few years and for most of that time they have got it wrong," he said.

"I believe the official rate is still half a percentage point above what it should be.

"What was needed during 2012 was bold action by the RBA but what they delivered was too little, too late.

"It will be no surprise to see the RBA board lower rates again when they meet next month and we have some commentators predicting rates could go as low as 2% this year.

"I still think more rate cuts from the RBA will help keep the market active although there are other factors which are also influencing consumers."

Mr Kolenda said the domestic economy has been subdued by lack of confidence and cost of living considerations such as rapidly rising utilities prices, food prices and even insurance.

"Consumers have been battered with gloomy economic news for a few years and they weren't helped by the RBA raising interest rates seven times during 2009/10 after taking the cash rate down to 3% in response to the global financial crisis," he said.

"With continuing concerns over the global economy conditions, the threat of a mining slow down, retailers hurting, no property price growth and with unemployment expected to rise the outlook is poor."

Topics:  market rate cuts rba


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Tourism body responds to 'useful' Wagner criticisms

Southern Queensland Country Tourism chair's Jane Summers.

Southern Queensland Country's chair said she will address criticisms

NDIS provides welcome break for a hard-working family

BIG HELP: Ann Priestley, Merle Searle, Troy O'Neil and Alicia Madsen at Wellways HealthCall respite house.

NDIS funding changes family's life.

Further 47,000ha under contamination investigation

This map provides information about the Hopeland and surrounding region excavation caution zone and investigation area.

Excavation Caution area now extends south of Hopeland

Local Partners

Sir Elton John coming to Mackay: What you need to know

MACKAY will play host to one of the world's biggest superstars Sir Elton John later this year.

MAJOR ANNOUNCEMENT: Global superstar to rock Mackay in 2017

A major concert is set to rock Mackay this year.

Mackay, Cairns to host world's biggest superstars Sir Elton John

Robert Irwin introduces Jimmy Fallon to wild guests

Robert Irwin introduces Tonight Show host Jimmy Fallon to a cuddly sloth.

ROBERT Irwin continues Steve's legacy.

MOVIE REVIEW: Trespass Against Us a 'tender' crime film

Michael Fassbender and Brendan Gleeson in a scene from the movie Trespass Against Us.

Tough British film about criminal clan proves touching

Crocodile, hippo fears as I'm A Celeb filming hit by flooding

Flooding hits the set of I'm A Celebrity ... Get Me Out Of Here!

Fears crocodiles and hippos could infiltrate I'm A Celeb camp

Small screen users make switch to smaller screens

In this photo taken Oct. 16, 2013, a girl plays Supercelll's Hay Day game on an iPad. The Finnish 'Clash of Clans' mobile game maker Supercell said Wednesday, Feb. 12, 2014, it plans to launch its third game next month on a tide of soaring revenues and profits. The new game, 'Boom Beach,' will be launched in March. It's been tested in Canada and Australia, ranking fifth in both countries' iPhone app store lists, according to the company. (AP Photo/Lehtikuva, Milla Takala)  FINLAND OUT

The digital age generation makes the switch

Nadia visits Coast to escape Married At First Sight drama

Married At First Sight's Nadia Stamp takes a breather from the show's drama at Mooloolaba.

MAFS bride unwinds on the Coast ahead of commitment ceremony

Popular island resort sells to loaded international investor

OUR PICK: Chris Foey's colourful shot of one of Gladstone's great tourism hot spots, Heron Island.

International investor snaps up piece of Gladstone paradise.

Expert: Why renters, home buyers may struggle

Matusik Property Insights director Michael Matusik.

What's next for the city's housing market

Massive seaside development of 3200 lots

DESIRABLE LIFESTYLE: The masterplan for the proposed Elliott Heads Estate.

"There's nothing else left along the coastline of Queensland now"

Potential home buyers punished for doing the 'right thing'

Should I go to university or buy a house?

50 more high rise buildings planned for Brisbane CBD

Height limits have been scrapped for Brisbane CBD

800,000 more people expected to work in city over next 20 years

Ready to SELL your property?

Post Your Ad Here!