Reserve Bank of Australia cuts interest rates by 0.25% but banks don’t pass on much of the cut
The Reserve Bank today cut the official cash rate by 0.25% to 1.50%. The Reserve Bank cited "moderating" growth in China and other emerging economies, low commodity prices (albeit up from recent lows), "very subdued growth" in wages, and the risk of "complications" arising from an appreciating exchange rate. In short, low inflation figures. It also cited growth in lending for housing purposes has "slowed a little this year", "strengthened lending standards" by banks, cautious attitude to lending in some segments (read non-residents), and "considerable" supply of apartments scheduled to come on stream over the next couple of years-particularly in eastern states. As a result, the following banks announced how they would pass on a portion of the interest rate cut to borrowers; CBA- will only pass on 0.13% NAB- will only pass on 0.10% ANZ- will only pass on 0.12% Westpac-will only pass on 0-10% (interest only loans) -0.14% (principal and interest loans) Retaining a large portion of the RBA rate cut, will enable the banks to shore up their balance sheets and help them to reduce some of the need to cut their dividend payout ratio-something that their shareholders would not appreciate and that would likely negatively impact on their share prices. One can deduce from the bank's moves, this RBA cut is one for the banks not for consumers nor Sydney's gen x and y investors or first home buyers struggling to come up with the deposits to borrow for their first property or home. For a complimentary review of your home loan or broader
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Doctors paying more interest to BOQ Specialist for their home loans
Are you a doctor with home loans or investment property loans from Investec/BOQ Specialist? You will be surprised to know that last week BOQ Specialist increased interest rates out of sync with the Reserve Bank of Australia (RBA) on their variable home loans products by 0.12% p.a. for owner occupiers and 0.25% p.a for investment property loans.
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RBA welcomes Sydney’s house price fall
For the first time in three years, Sydney’s house and apartment prices fell in the fourth quarter of 2015. According to the Australian Bureau of Statistics, the value of houses fell 2.1%, which is the largest fall in seven years, and the value of apartments, detached dwellings, townhouses and duplexes fell 0.8%.