Home Owners Not Expecting an April Rate Cut
Most Australian home owners expect the Reserve Bank of Australia (RBA) to leave interest rates on hold for a fourth consecutive month, a national survey has found.
The poll by leading mortgage broker Loan Market which asked ‘What action do you think the RBA is going to take at its April meeting?’ found 57 per cent of respondents anticipate the current cash rate to be maintained at 3 per cent.
Loan Market spokesman Paul Smith said 40 per cent of the 382 online respondents tipped the RBA to lower the official rate by 25 basis point and only a handful of respondents thought the RBA would lower rates more than 50 bps and unanimously tipped that rates would not be raised.
“Improvements in the economy are aiding in the return of confidence to the property and finance markets. With improvements in housing affordability and historically low interest rates, the real estate industry is really starting to gain some momentum,” Mr Smith said.
Mr Smith said that while it appears that home owners did not expect a rate cut, they should continue to see strong competition between lenders and that variable interest rates could fall as cost-of-funding pressures ease for the banks.
“Even with minimal rate movement, lenders are competing with each other on discounting, fee’s and product features. If you’re looking at refinancing your home loan or applying for one you should certainly shop around and negotiate or use the services of a mortgage broker who can do this on your behalf,” he said.
Mr Smith said that the percentage of home owners who are predicting no movement in March was up from the same survey held for the February and March RBA meetings where 53 and 55 per cent correctly predicted no movement.
“Clearly home owners are well aware of the likelihood of the RBA moving interest rates and one of the most accurate sources of rate predictions.”
Loan Market survey results:
What action do you think the RBA is going to take at its April meeting?
- Lower rates 25 bps 40%
- Lower rates 50 bps 3%
- Raise rates 25 bps 0%
- Leave rates unchanged 57%