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:  1300homeloan, market, rate cuts, rba


Join the Community.

Get your local news, your way.

Stay Connected

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

Back to basics for Springborg after leadership loss

LEADERSHIP LOST: Lawrence Springborg has been dumped as the leader of the LNP in Queensland.

Dumped Opposition Leader returns to electorate

Jobs up for grabs right now

Jobs up for grabs right now

Nanango MP new deputy leader of Queensland LNP

Nanango MP Deb Frecklington has been named deputy leader of the LNP.

Ms Frecklington was elected unopposed in leadership spill

Latest deals and offers

Eidsvold fire victims life support to be turned off

THE toddler who received burns to 80 per cent of his body following a house fire in Eidsvold will reportedly have his life support turned off on Saturday.

Back to basics for Springborg after leadership loss

LEADERSHIP LOST: Lawrence Springborg has been dumped as the leader of the LNP in Queensland.

Dumped Opposition Leader returns to electorate

Jobs up for grabs right now

Jobs up for grabs right now

Nanango MP new deputy leader of Queensland LNP

Nanango MP Deb Frecklington has been named deputy leader of the LNP.

Ms Frecklington was elected unopposed in leadership spill

Man taken to hospital after quad bike crash

BUSY TIMES: Kingaroy Hospital had a busy year but a new hospital could be a long time away.

Man in fifties injured in crash taken to hospital

Country kids in touch with agriculture

VEGGIE PATCH: students at Kingaroy State High School get in the garden for their horticulture program.

Country kids are in touch, unlike their city counterparts.

Federal Police Defuse Dance Bomb

Australian Federal Police respond to "threat" in Canberra.

Australian Federal Police respond to "threat" in Canberra.

NSW Police join Dance Challenge

NSW Police show their moves at Manly Wharf.

Manly Wharf is the backdrop to NSW Police running-man dance entry.

Scotland Police accept Dance Challenge

NZ Police doing the running man dance.

Australian Federal Police say watch this space but NT Police feel ignored.

Demand for acreage lots pushes up property prices

Property values in Cooroy have increased 25%

Property values jump in Cooroy and Peachester.

How a sacked real estate agent made $725k in four months

Agent is now under investigation by the industry watchdog

RBA warns of future apartment oversupply

Toowoomba: Crest Apartments and Burke & Wills, Ruthven Street ( view from Neil Street) Photo Bev Lacey / The Chronicle

RBA says oversupply of apartments poses risk to household finances