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RBA should focus on fewer, larger rate reductions: Residex

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Australian Broker | 31 Dec 2012, 08:00 AM Agree 0
Residex analyst John Edwards says the Reserve Bank should lower interest rates next year, but say they out to do it in fewer, more substantial cuts
  • Thomas | 31 Dec 2012, 01:37 PM Agree 0
    Why don't you guys do an article about credit and its more limited availability and how that affects prices?

    All of this other stuff is kind of fluffy.

    The slow, incremental tightening of credit policies, combined with the slow incremental downward pressure valuers are being placed under by lenders, is the real news.

    And it all comes back to the fact banks can't access as much money as they used to be able to access, can't fund as many different types of loan products as they used to be able to ( i.e riskier profiles- see lo doc and no doc and high LVR/non gen savings)

    In other words, less money available to less people. So the very things that allowed the great credit era to evolve and expand (more money to more people) and in turn create growth, have now reached a plateau or come to an end, and with that comes an end to aggressive growth.

    There's a gentle credit rationing exercise going on. Nothing too severe, but just enough to put a gentle amount of downward pressure on prices. Its been underway for a few years now. That should be where you focus your reporting.
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