Don't touch rates: Loan Market

Don't touch rates: Loan Market

17 May 2011 by Staff Reporter 0 comments

Staff Reporter

The RBA could be forced to sit tight for another month, as new data shows home loan approvals dropped again in March.

New data from the Australian Bureau of Statistics showed a 1.5 per cent fall in official home loan approval figures in March.

This means the March quarter year on year has now dropped 6 per cent.

Loan Market chief operating officer Dean Rushton said the latest figures highlight the fragility of the home loan sector.

Mr Rushton said one of the major influences on the home finance market was expectations of the RBA taking the cash rate up from its present level of 4.75 per cent in the near future.

“While the RBA keeping rates on hold for the past six months has been a comfort for many home owners, the specter of future rate rises is also adversely affecting consumer confidence,” Mr Rushton said.

“Consumers are aware the RBA is looking to keep a lid on rising inflation but the central bank needs to be cautious when considering rates.

“Australians have been battling several natural disasters and cost of living increases across the board. Many sectors such as retail and small business are already being hit hard.

“Another rate rise could unnecessarily punish mortgage holders and deter those looking to get into the market.”

Staff Reporter

The RBA could be forced to sit tight for another month, as new data shows home loan approvals dropped again in March.

New data from the Australian Bureau of Statistics showed a 1.5 per cent fall in official home loan approval figures in March.

This means the March quarter year on year has now dropped 6 per cent.

Loan Market chief operating officer Dean Rushton said the latest figures highlight the fragility of the home loan sector.

Mr Rushton said one of the major influences on the home finance market was expectations of the RBA taking the cash rate up from its present level of 4.75 per cent in the near future.

“While the RBA keeping rates on hold for the past six months has been a comfort for many home owners, the specter of future rate rises is also adversely affecting consumer confidence,” Mr Rushton said.

“Consumers are aware the RBA is looking to keep a lid on rising inflation but the central bank needs to be cautious when considering rates.

“Australians have been battling several natural disasters and cost of living increases across the board. Many sectors such as retail and small business are already being hit hard.

“Another rate rise could unnecessarily punish mortgage holders and deter those looking to get into the market.”

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