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Category Archives For: Interest Rates

Which bank lifted interest rates by more that 0.25%? The Commonwealth Bank

As the Reserve Bank of Australia lifted rates by the 0.25% on Tuesday, Commonwealth Bank adjusted their rates by an additional 0.05% to make the total move a 0.30% increase for their customers.

In an interesting move Commonwealth Bank blamed the USA Sub prime disaster as to one of the core reasons why this adjustment had to take place. I would have thought that any exposure the Bank had created for itself by getting tangled up in the mess should be carried by itself rather than the customer.

What can you do if you have an existing home loan with Commonwealth Bank? Customers can vote with their feet and look at re financing with another burrower or swap over their general banking, I think then the bank will take a closer look at the whole situation!

 

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Interest rate alert

For the 3rd time in 6 months the Reserve Bank of Australia has raised official interest rates by a quarter of a percentage point to 7.0%.

Inflation has been blamed for the latest increase which was above the RBA's 2-3% threshold. On an average mortgage of $250,000 this is expected to add approx $52 per month to the loan repayment, while the outer city is not totally immune it should adapt to the new change.

For outer districts of Melbourne this is where the latest rate rise will more than likely hurt.

 

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American interest rates

americanflag1Overnight the American Fed has cut interest rates for the 2nd time in 9 days. The .5% cut has now reduced the short term rate to just 3% with many experts believing the Fed will cut rates by a further .25% in March.

With America on the verge of a recession and it's housing prices in retreat it is often discussed how this affects Australia's future and its housing market.
America slowed to 0.6% annual growth in the last quarter of 2007 which is completely different to where the Australian economy has been heading, the OECD forecasts the Australian economy to grow by 3.3% in 2008.

While not immune to the sub prime disaster that's happening in the USA at the moment, Australia has not got it self into the same mess. If you are looking for a sign at the moment then look at all the credit card companies pitching ads with very low rates for credit card debt transfers!

In fact because of our strength not through lack of it we may see a further interest rate rise shortly, this is sure to test the outer suburbs of capital cities but I feel will leave the inner city area's largely unaffected with strong house growth predicted again this year.

Australia has a diversified group of trading partners; Australia has been ranked the most resilient economy in the world for 5 of the past 6 years (IMDWCY2007) in part because of that.
Asia forms the majority of who we trade with and has a large affect on the strength of our economy, currently this is strong and is predicted to keep growing and quickly!

While no country is immune to changing economic conditions, Australia's future and property market look strong for the outlook ahead while home owners in America should brace themselves for some tough times still ahead!

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