http://sourceable.net/interest-rates-reach-1-5-report/
Does this sound likely? I say no, but then most of europe, america, japan etc are near 0%
Does this sound likely? I say no, but then most of europe, america, japan etc are near 0%
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Peter, your livelihood is from homeloans (I imagine). The lower the rate the more moola you make.....right?
I guess another 1% cut is possible, but I think it unlikely. The RBA is concerned about keeping rates low to keep inflation down, but at the same time they're making a lot of noise about an overheated property market right now and they know dropping rates further is going to only encourage borrowers which will have a flow on effect to further increases in property prices.
Personally I think they should have stopped cutting at 6%, I don't see that the last 1% in rate cuts really helped the economy but it did light a flame under the property market which was unnecessary IMO.
Bardon said:18 Nov 2014, 11:57 AM
It increasingly looks like we are in for a long period of low rates.
Glenn Stevens said:Yes, I think a period of stability is what's called for and the most prudent course of action from here. I wouldn't mind cutting a little deeper, given the hit to terms of trade we've taken, but at the same time, I'm worried about over-exuberance in the Sydney housing market. It doesn't take much at all to get Australians excited about piling into residential property, and I'm finding myself somewhat trapped between these two concerns at the moment. We'll find a way through. We always have before.
Glenn Stevens (or a dedicated imposter) is being quite open about rates on the Australian Property Forum. Can't link (it gets blocked but read below):
I find it hard to believe our reserve bank governor posts on APF. Has the account been confirmed? If so then that is awesome.
Lower rates definitely encourage people to pay more for houses, which means bigger loans, which means more money per transactions.
The problem with rates being super low is that everyone starts to qualify for a loan and this has a negative impact for many people when rates go up. That's actually quite bad for my business as well.
If rates fall I would think credit will get harder, not easier.
The problem with rates being super low is that everyone starts to qualify for a loan and this has a negative impact for many people when rates go up. That's actually quite bad for my business as well.
It also brings out the entrepreneur and the thought process revolves around the interest rates as the demand increases price begin to climb till it stops as it always has then they go down, then people are unable to pay the mortgage payments,it's interesting reading in this site several years ago when the rates were just below 8%,,i'm will be going too several banks agm's over the next month and that's one of the questions I will be asking the board,how do you stress test the system when the tide turns and the rates go back to normal levels..
I doubt rates will go back to 8% any time soon. I think the new 'normal' is going to be rates below 6% for the foreseeable future. Certainly rates will go up to 8% at some point, but I can't tell you when that might be. It could be 3 years, it could be 30.