The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.

Category Archives For: Interest Rates

RBA ready to cut rates

Well it looks pretty certain we could see a rate cut in 3 weeks time.

This will be a really interesting time for the property market. We could see some real stimulation back into the market, which is great for those who have recently purchased in slightly gloomy conditions while possible scary for those about to take the plunge.

A worthwhile read on the likely rate rise is here

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Interest rates on hold

As everyone will be well aware, rates were left on hold on the 5th August.

TV stations crossed live to hear the rather predicable ‘rates are on hold’ statement from the RBA.

A decrease in rates is predicted by the end of the year. It’s been almost 7 years since the last decrease.


Rising interest

A common question that I keep encountering is a very good one: Why do banks raise rates when the RBA (Reserve Bank Australia) does not?

The credit crisis happening in the financial world at the moment makes credit harder to get. This then means that a premium must be paid by the banks in order to get the available credit.

Australian banks may source more than 70% of the total funds used in your home loan from overseas money markets. This is why the increases have been occurring outside RBA rises.

It would be disappointing, when credit becomes cheaper for the banks; that they don’t make the same incremental decreases. That, we'll have to wait and see!

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Interest rates remain on hold

For the 4th straight months, interest rates have been left on ‘hold’.

The governor of Monetary Policy; Glenn Stephens, appears by the statement to be reasonably satisfied with the long term outlook for interest rates.

Glenn Stephens finishes his assessment with ‘Looking further ahead, inflation in both CPI and underlying terms should decline over time, provided demand continues to evolve as expected’

This shows good merit to the possibility of the next interest rate move being in a downward position rather than up. Some economists are predicting this downward adjustment to be mid 2009.

Interest rates may have just done the job

Westpac’s senior economist Anthony Thompson thinks we have seen the end of interest rate rises with the March quarter expected to show an easing in the level of inflation which is what has been causing the rate rises of recent times. 

This is great news for home owners and those looking to enter the property market, expect the reserve bank to be reserved about the newest figures as they don’t want to fire up spending again!


Home Loan podcast

Check out this weeks pod cast with Andrew White from Australian Real Estate Home Loans.

We take an inside look as to how recent interest rate rises are affecting people out in the marketplace and what you can do to stay on top of it!


ANZ and St George bank announce new variable rates

ANZ and St George bank have both lifted their variable lending rates by 35 basis points which are .10% basis points more than the 25 basis points increase set by the Reserve Bank.

It seems both banks are indicating a higher cost of borrowing money on global markets is to blame.

This now completes the variable rates set by the major banks after the rate rise last week.

The variable rates set by the big banks are now:  
National Australia Bank: 9.27% (an increase of 29 basis points)
Commonwealth Bank: 9.32% (an increase of 29 basis points)
ANZ Bank: 9.37% (an increase of 35 basis points)
Westpac: 9.27% (an increase of 30 basis points)
St George: 9.37% (an increase of 35 basis points)

The increases are all above the 25 basis points set by the Reserve bank of Australia, some of the rates above are not in effect until later in the week.

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Interest rates move up again

The Reserve bank as expected has raised interest rates again today.

The board of the Reserve bank made the decision to lift the cash rate by 25 basis points to 7.25% effective today.

Since May 2002 they’re has been 12 successive rate rises and not since 1996 have we seen higher interest rates. The blame, as pointed by yesterdays blog is the very high levels of inflation which is concerning the Reserve bank.

Interesting to note is the Prime Minister warning banks against raising the interest rate that is charged to the customer being any higher than today’s rate rise of 25 basis points which the banks have been doing in the past few months.


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Interest rate pain for home buyers

vegetablesLooks like some bad news for home owners, another interest rate rise is almost certain to happen tomorrow when the RTBA meets.

We have not seen back to back interest rate rises since late 2003 however with yearly inflation at a 6 year high of 4% (February rose 0.3%) this is well above the Reserve Bank’s target and is expected to force them to raise interest rates tomorrow.

To blame for the high inflation figures were the soaring costs of Vegetables (if you haven’t noticed I suggest eating more vegies!), financial services and the continual rent increases we are seeing throughout the country.

For more information check out this article, Inflation Jumps to six-year high

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