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Symond joins Melbourne Cup rate cut chorus

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Australian Broker | 02 Nov 2012, 06:00 AM Agree 0
Aussie Home Loans' John Symond has urged the RBA to further reduce the cash rate next Tuesday
  • Peter Wood | 02 Nov 2012, 10:11 AM Agree 0
    John is right on the money...reduce the rates... devalue the Aussie dollar and lets get some domestic growth !
  • overthrborderbroker | 02 Nov 2012, 10:17 AM Agree 0
    Consumer confidence is at an all time low with property values still bouncing along the bottom. Some States have incentivised buyers to construct or buy brand new homes and latest statistics are being touted as showing a recovery in the sector. The developers and vendors have simply jacked up their prices to take full advantage of the increase in grants. Just watch what will happen in a couple of years when young people who manage to squeak in to these properties at highest LVR, maximum servicing and with minimal savings (relying more on the grants than cash in bank) start the sad treadmill of divorce and separation. They will find that they own negative equity and the whole incentive programme will end up in tears as the banks foreclose and hound them personally for the shortfalls.
  • Scott Beattie | 02 Nov 2012, 10:33 AM Agree 0
    Didn't Aussie only pass on .18% of the .25% rate cut last month?? This 'chorus' calling for more rate cuts need to ensure that they are all singing from the same song chart!!
  • BrisbaneBroker | 02 Nov 2012, 10:44 AM Agree 0
    Property values bouncing along the bottom??? Travel outside of Australia and talk to people from other countries. Over the past few months we've met Americans and Europeans who admiringly say, wow, you guys are so lucky in Australia. Symond just wants to go on the record as fighting for the right of the Aussie battler, but a rate drop at this time is counterproductive. We've just had a rate drop, every real estate agent I've spoken to is happy with increased inquiry, China's economy is growing.

    Dropping the interest rates is our last recourse, because once they're down, then we have nowhere else to go.

    The flipside of the happy results for mortgage holders getting lower interest rates, is the pressure this puts on savings. Think about the self-funded retiree, living off interest on $500k in the bank they spent their lives accumulating. When the bank pays them 5% pa, they're getting $25kpa. When the interest rate drops to 2.5% they're getting $12.5kpa.

    In the US, the UK and Europe - people with savings, particularly retirees, are absolutely stuffed - they're too afraid to put money into shares and putting it in the bank is a worthless exercise.

    Let's hold off on further rate cuts until we really, really need to..
  • Wilko | 02 Nov 2012, 11:50 AM Agree 0
    Holding off until we really really need to is what causes the issue.We are one of the few countries that can drop and still have some in the kitty.

    Its not just about housing it is about the associated onflow and if you listen to everything John Symond and others are saying, it is about stimulus and real time onflow to other industries like Retail and Manufacturing.

    This commentary and analysis is spot on and for once Symond is not the lone voice. Lets get this country saving and spending as too much of either is not good but a balance can produce both monetary and fiscal results.
  • Pass it on | 02 Nov 2012, 12:21 PM Agree 0
    If Symond is asking for a rate cut then let’s see Aussie pass it on in FULL if it comes. I think that the public is sick of lenders hiding behind “the cost of lending” excuse. How can you expect potential new home buyers to have any consumer confidence when they see lenders only passing on as little as they can get away with.
  • Al Dawson | 05 Nov 2012, 02:28 PM Agree 0
    Sadly, rates will probably continue to drop while the $A remains so high. Welcome to the Dutch disease many say we don't have while using the term “two speed economy” in the same breath. We seem to be moving into a dangerous dependence on cheap credit and it seems to me that even the dealers are junkies these days.
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