RBA 'too little, too late' to stop home loan fall

by Adam Smith15 Jan 2013

Australian home loan approvals fell a seasonally adjusted 0.5% in November from October, according to newly released ABS figures, and one industry figure has placed the blame squarely on the RBA.

1300HomeLoan managing director John Kolenda has accused the RBA of failing to move quickly enough on rates. Kolenda said the shock fall in home loans after most economists predicted a 0.5% rise is due to the Reserve Bank's reticence in moving aggressively on rates.

"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. I believe the official rate is still half a percentage point above what it should be," Kolenda said.

In spite of the RBA's loosening cycle since November 2011, Kolenda said the Bank had still failed to jumpstart the housing market.

"What was needed during 2012 was bold action by the RBA but what they delivered was too little, too late," he said.

Kolenda claimed it would be "no surprise" to see the Reserve cut rates again when it meets in February, and said some economists predicted the official cash rate could fall as low as 2%.

"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," he said.

COMMENTS

  • by sidbroker 15/01/2013 8:08:46 AM

    Its good to see someone pointing the finger at the RBA apart from myself. I agree with John here. RBA have been playing with rates since 2003 trying to control property prices but instead have been very destructive to our economy and well being.

  • by Wilko 15/01/2013 9:59:20 AM

    Aussie, AFG and most of the Aggregators have been doing this for 12 months and now Kolenda ha joined the chorus. The RBA is out of touch.

  • by Local Broker 15/01/2013 10:02:17 AM

    The real question was why they ever went so high after 2009? Just when the economy was starting to see some small recovery the RBA sent the cash rate through the roof unjustifiably.