CEO request: Australian property borrowers need a break
20 April, 2010
CEO of Mortgage Choice, Australia’s largest independently-
He says there is no compelling reason for Australia’s official interest rate to be increased before the beginning of the new financial year, at least.
“You only have to glance at the drop in housing finance demand over the past five months to see the serious effect recent interest rate rises have had on demand for residential housing. Consumer sentiment is being damaged, in particular amongst recent first homeowners and prospective first time buyers,” Mr Russell said today.
“With the housing market accounting for a significant portion of GDP, the government and the Reserve Bank should be thinking long and hard about their fiscal and monetary reactions.
“Five official interest rate rises in seven months, out of cycle increases by lenders and much tighter lending criteria are combining to cause great concern for property buyers and property owners alike.
“With this in mind, the unpredictable economic data coming through, and the lengthy lag between a rate rise and its effect on consumers, there is no doubt in my mind the cash rate should be kept stable until July at least. It is time to back away from the red ‘increase’
“Recent first homebuyers are especially vulnerable. I’m sure the majority didn’t expect rates to rise so quickly and are now nervous about meeting the challenge. Australians who are still experiencing underemployment are another group likely to be feeling the heat; notwithstanding the steady employment numbers, this remains at high levels across our country.
“Our serious housing undersupply problem and decreasing housing finance commitments are sure to exacerbate rental price growth and quickly reduce rental vacancy rates. This is great news for investors but bad news for anyone trying to buy into the housing market for the first time or upgrade to a new home.”
For further information or to arrange an interview, please contact:
Kristy Sheppard
Mortgage Choice
(02) 8907 0502 / 0407 450 860
kristy.sheppard@
