A leading economist has hinted yesterday’s rate cut may not be enough to deliver a recovery in the housing market.
Tim Hampton, senior economist at BIS Shrapnel said that while the cut was expected, another one may be necessary before year’s end.
“We think the Reserve Bank will likely deliver one more cash rate reduction before the end of the year, probably on Melbourne Cup day,” he said.
“This will get interest rates to a level that will deliver the recovery in dwelling building and other domestically-focused industries and take some heat out of the Australian dollar.
“However, if that is not the case, then further cash rate reductions around the second quarter of next year could be on the cards,” he said.
Phil Naylor, CEO of the MFAA, said the real issue was a lack of confidence on the part of borrowers.
“I think a cut might help, but I think the problem for the property market (with already fairly low interest rates and fairly strong employment figures) is one of lack of confidence,” he said.
“Normally with the current economic environment we would see the property market pretty active but that has not been the case – this latest cut may make a difference.”
Looking for more information on mortgage rates and refinancing? Click here
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out