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More rate cuts needed: State Custodians

More rate cuts needed: State Custodians

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Staff Reporter

Additional rate cuts may not be enough to stimulate buyer activity, one stakeholder has claimed.

Speaking to Real Estate Business, State Custodian Mortgage Company director Heidi Armstrong said borrowers have changed the way they think about finance, with many taking a very cautious approach to buying and selling property.

"I think it will take a lot more than a couple of rate cuts to get borrowers and investors out in the property market again," Ms Armstrong said.

Her comments come just days after the Westpac Melbourne Institute Index found consumer confidence had fallen to its lowest level since August.

According to the Index, consumer sentiment fell by 8.3 per cent in December from 103.4 in November to 94.7 in December.

With sentiment down and falling, Westpac's chief economist Bill Evans said it is now very likely that the Reserve Bank would look to cut rates again at its February board meeting.

"It is our view that rates are still slightly above neutral giving plenty of scope for more cuts. This read on consumer sentiment will be noticed by the Bank although it will also observe the resilience of overall consumer spending as measured by the national accounts despite generally poor prints for Consumer Sentiment in the second half of 2011," Mr Evans said.

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More rate cuts needed: State Custodians
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