"For mine, this week’s drop in official rates will have very little impact on our economy. The banks are limited as to how much they can pass on."
What we know about the housing market in the wake of the RBA's cash rate cut
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Yes, interest rates fell.
But what do we know?
The local economy is tough. Overseas markets more so. Or is it more about structural change than cyclical factors? Ditto Australia’s housing markets.
Australians are saving at near-record rates.
Budget cutbacks means less fiscal stimulus.
We are spending money but on different things – travel and online goods, not local produce and especially not new housing (or established housing, for that matter).
We are paying down our mortgages, and taking on new debt is way out of fashion.
Inflation looks contained – well, for now.
Established house prices are starting to rise – up over 3% since May or close to 9% on an annualised rate.
Population growth across Australia is on the rise again.
The Aussie dollar remains high.
Very few people are admitting they like Alan Jones right this minute.
For mine, this week’s drop in official rates will have very little impact on our economy. The banks are limited as to how much they can pass on. Rates are expected to fall again in November.
True, a rate drop is better than a rate rise, given our current collective frump.