Most Australian homeowners believe the Reserve Bank of Australia (RBA) has finished cutting interest rates and that the cash rate will likely stay put until 2014, according to a survey by mortgage broker Loan Market.
The online survey of its home loan customers found that 62 per cent of respondents did not anticipate further rate movements this year and that the cash rate would remain at 2.50 per cent through the Melbourne Cup day and pre-Christmas RBA meetings.
Loan Market director Mark De Martino said that with consumer sentiment lifting and plenty of spring activity in the property market the Reserve Bank was ‘between a rock and a hard place’ with other areas of the economy not faring as well.
“The Australian cash rate has never been this low and for so long – the RBA has done its part in helping out the property market and homeowners. Rates are a big factor in what motivates buyers,” Mr De Martino said.
Mr De Martino said that rates could drop again if the Aussie dollar continues to remain high and if inflationary pressures remain soft and below the RBA’s target, but for now homeowners did not expect any rate movement.
“As the economy tries to balance itself out from its reliance on the resource sector this survey has revealed homeowners predict the RBA won’t see the need to adjust interest rates until the new year.”
Mr De Martino said that with the RBA moving the cash rate eight times in the past three years, consumers have grown to expect stability from the cash rate and that has helped them in formulating accurate budgets.
“Homeowners on variable rates know that their repayments will fluctuate many times during the term of the loan. However the stability from the cash rate has given homeowners the confidence that their rates movements will be seldom and generally predictable.” he said.
When do you expect the RBA to move the cash rate next?
A) November 12%
B) December 15%
C) February 2014 35%
D) Later in 2014 38%