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RBA: Was it right to sit tight?

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Australian Broker | 08 Aug 2012, 08:00 AM Agree 0
While it surprised very few, the RBA's decision yesterday to sit tight on a 3.5% rate has the industry divided on whether it was right to do so
  • John Black | 08 Aug 2012, 10:30 AM Agree 0
    I talk to a lot of people and most of them are doing it really tough at the moment especially those SME's connected with real estate, construction both commercial and residential, mortgage and finance brokers, manufacturing and the retail sector. Rates may be lower than they were but the economy apart from the mining sector is flat and I cannot understand how the powers that be cannot acknowledge just how much hurt exists in the economy at large. Rates need to come down significantly as parts of our economy are in recession currently.
  • Opinion WA | 08 Aug 2012, 10:36 AM Agree 0
    Let's be honest would the HIA ever come out and say building levels were satisfactory?
  • Tim | 08 Aug 2012, 11:11 AM Agree 0
    Apart from the period from February 2009 to December 2009 when the GFC was most seriously affecting us the Reserve Bank cash rate is at the lowest it has been in the last 22 years. So the Reserve Bank seem to be doing their bit to try and stimulate activity.
    If the HIA and other similar groups want to get more activity happening then maybe they should start talking things up and focus on this positive aspect of low interest rates for one.
    Like your correspondent from WA I too think the HIA need to change their attitude. We need confidence to increase in the economy to get things happening again and the HIA are just one group that could lead this push.
  • Raman Arun | 08 Aug 2012, 11:45 AM Agree 0
    Developers and builders can benefit themselves and the purchasers by putting their greed on check. The prices demanded are in general unrealistic. HIA should look investigate this farce before mounting pressures force appointment of a Royal Commission. How many occassions do we brokers see where valuations come far lower than the price paid! No wonder buyer confidence is low..
  • Daniel | 08 Aug 2012, 12:11 PM Agree 0
    It would also help if construction prices are coming down a bit. Investors need to pay 390K for house and land and when completed the valuation comes in at 350K. Most of the people who purchased land with the idea of building on it themselves are having troubles because the combined price of land and building is higher than the value of a completed home.
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