Home Owners Split on Upcoming RBA Rate Decision: Poll

An equal number of Australian home owners are anticipating that the Reserve Bank of Australia (RBA) will hold interest rates steady or lower them at its board meeting next Tuesday, according to a poll by leading mortgage broker Loan Market.

The online poll which asked 538 home owners, ‘what action do you expect the RBA to take at its August meeting’ found that 45 per cent of respondents anticipated the RBA to keep rates unchanged at 2.75 per cent while another 45 per cent forecasted a 25 basis point drop.

Loan Market director Mark De Martino said that election uncertainty and the mixed bag of economic data was making the August rate decision a difficult one to predict.

“The RBA has a difficult decision to make in August because the cash rate is already so low and further rate reductions are going to have a limited impact without other areas of support,” he said.

“While home owners and prospective buyers are reaping the benefits of the lowest cash rate in several decades, it’s been equally encouraging to see banks and lenders start to offer big discounts and rate movements not normally seen when the RBA is holding the cash rate idle.”

Mr De Martino said that regardless of the RBA’s rate decision on Tuesday home owners and prospective buyers should be active in seeking better deals from lenders who are all competing against one-another.

“There’s lots of discounting and fee waiving going on behind the scenes for customers that are asking their banks the right questions or using a mortgage broker to negotiate a better rate for them,” he said.

Mr De Martino said that fact that the most financial markets were pricing for a rate-cut meant he was anticipating a rate reduction of 25 bps.

Survey Results

What action do you expect the RBA to take at its August meeting?

a)     Lower rates 25 bps                                45%

b)     Lower rates 50 bps                                 6%

c)      Leave rates unchanged                        45%

d)      Raise rates 25 bps                                 4%