RBA defends banks

The Reserve Bank of Australia has defended the move by Australia’s banks to increase interest rates beyond the .25% increase announced by the RBA on Melbourne Cup Day. Nearly all lenders have increased their variable rates between .25% and .45% with the Commonwealth Bank rising by .45%, closely followed by NAB at .43%.

Reserve Bank deputy governor Ric Battellino said banks are not increasing their profit margins on the back of rate rises. He told members at a Perth business lunch yesterday that bank margins have not changed in the past six years – remaining in the range of 2.25% and 2.5%. Read More »

Major banks could face rate freeze

Australia’s major banks could face a 24-month freeze from raising rates outside of RBA movements should the Green party successfully steer new legislation through parliament.

In an e-mailed statement released early this week, the party announced it would be introducing the ban in the lower house, along with rules that banks pass along decreases to the official central bank rates and scrap some small fees.

“The Banking Amendment (Delivering Essential Financial Services for the Community) Bill 2010 provides legislative protection for customers including a ban on unfair A$2 bank ATM fees, ensuring basic fee-free bank accounts, capping the level of mortgage exit fees, and introducing a variable rate mortgage product (“Fair Price Mortgages”) that will only permit genuine changes to the lender’s cost of funds to be passed on to customers,” said Senator Bob Brown in a statement. Read More »

RBA’s rate hike dampens home buyer spirit

The RBA’s latest rate hike significantly dampened home buyer spirit over the weekend.

Data from Australia Property Monitors found just 7.1 per cent of properties cleared in Brisbane over the weekend – significantly down on the 38.2 per cent achieved this time last week.

The news was just as sour in Melbourne, Adelaide and Sydney.

In Sydney 53.8 per cent of properties cleared – down from the 67.4 per cent achieved this time last year.

The dearest property sold in the capital city over the weekend was a three bedroom house in Newtown, which went under the hammer for a cool $13.9 million.

The cheapest property sold was a one bedroom unit in Fairfield which went under the hammer for $135,000.

Source – The Adviser

First home buyers pass the baton to upgraders

Posted by Infochoice 0n 11/9/09

The big worry for lenders in the housing finance market has been that when the strong push from first home buyers came to an end the market would lose its momentum and be back in the doldrums.

Housing finance figures released by the Australian Bureau of Statistics  this week suggest that first home buyer demand has indeed peaked.  After rising steadily in response to low rates and government stimulus first, home buyer share of all dwellings financed peaked at 28.5 per cent in May and fell back to 27.1 per cent in June and 25.7 per cent in July. Read More »

Interest rate put on hold for fourth month in a row

Interest rates were left on hold for the fourth month in a row and signalled the end to its recent rate cutting cycle, economists said after the RBA decision to leave the cash rate at 3% on Tuesday.
RBA governor Glenn Stevens indicated monetary policy was now on a neutral footing.  Here are some of his comments:

“The board’s judgment is that the present accommodative setting of monetary policy is appropriate given the economy’s circumstances,” Mr Stevens said. Read More »