Now all eyes are on the banks. How much will they pass on? My guess is not much, if any. The RBA has panicked. If anything, this will make house prices crash even faster when people wake up to the fact the banks aren't passing it on and the Reserve has lost control of the economy. It's all downhill from here.
I would be very surprised if the banks don't pass through at least 40bp on this one. Stevens put them on notice with the paragraph about reduced funding costs. He's been backing the banks aganist Swan up to now, but I think that was a hint that he won't on this one.
I know people who have an offer on their property contingent on there being at least 25bp drop today.
This will make a difference at least in the short term and probably the medium term.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Now all eyes are on the banks. How much will they pass on? My guess is not much, if any. The RBA has panicked. If anything, this will make house prices crash even faster when people wake up to the fact the banks aren't passing it on and the Reserve has lost control of the economy. It's all downhill from here.
I would be very surprised if the banks don't pass through at least 40bp on this one. Stevens put them on notice with the paragraph about reduced funding costs. He's been backing the banks aganist Swan up to now, but I think that was a hint that he won't on this one.
I know people who have an offer on their property contingent on there being at least 25bp drop today.
This will make a difference at least in the short term and probably the medium term.
WTF, a property deal contingent on a rate cut? Thats seriously poor financial planning IMO. What will they do if they raise rates next month or the month after, sell?
Doesnt really matter what RBA says about the banks, they're answerable to their shareholders and noone else. Thats capitalism for you. They'd obviously like to avoid bad PR, but they're the ones thats got to find the money in a fairly challenging economic environment. This could also affect deposit growth, increasing their reliance on external funding.
Thankfully the dollar only dropped half a cent. I look forward to doing my bit to damage the Australian economy over the next few days by buying some clothes OS.
I reckon the banks won't pass on anything. They've got as many idiots as they possibly can get now and will milk them.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
I'd expect this to slow the house price falls and perhaps even put a floor under prices for several months. If there are no further rate cuts, then I'd expect falls to continue, requiring further rate cuts. Rinse, repeat until ZIRP.
Thankfully the dollar only dropped half a cent. I look forward to doing my bit to damage the Australian economy over the next few days by buying some clothes OS.
I reckon the banks won't pass on anything. They've got as many idiots as they possibly can get now and will milk them.
You serious? The world hasn't woken up yet. Down 1c now. I would expect it to get hammered when Europe opens, and then round 2 when the US opens. This sort of thing doesn't instil confidence. There will be many foreign investors wondering if they made the right move, and whether the trend will continue. Have you ever seen a 0.5 drop that wasn't followed by smaller drops?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
I'd expect it to slow falls in some areas, maybe even boost Perth a little... but in Melb, Sydney, not make much difference. Lot will depend on the macro-environment esp Europe.
Quite interesting to speculate as to what proportion of the 2009 boom was due to rates versus FHOG...
You serious? The world hasn't woken up yet. Down 1c now. I would expect it to get hammered when Europe opens, and then round 2 when the US opens. This sort of thing doesn't instil confidence. There will be many foreign investors wondering if they made the right move, and whether the trend will continue. Have you ever seen a 0.5 drop that wasn't followed by smaller drops?
It'd have to go down to probably 50c for it to make it not worth my while.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
You serious? The world hasn't woken up yet. Down 1c now. I would expect it to get hammered when Europe opens, and then round 2 when the US opens. This sort of thing doesn't instil confidence. There will be many foreign investors wondering if they made the right move, and whether the trend will continue. Have you ever seen a 0.5 drop that wasn't followed by smaller drops?
I wouldn't expect a huge change in the dollar. This RBA move was widely anticipated. 25 points was certain and 50 points was very likely. This was already priced in to the dollar. You would only experience a large change in the dollar if the RBA did something unexpected, something that the dollar hadn't already priced in.
You serious? The world hasn't woken up yet. Down 1c now. I would expect it to get hammered when Europe opens, and then round 2 when the US opens. This sort of thing doesn't instil confidence. There will be many foreign investors wondering if they made the right move, and whether the trend will continue. Have you ever seen a 0.5 drop that wasn't followed by smaller drops?
It'd have to go down to probably 50c for it to make it not worth my while.
In recent history the $AUD has always fallen, and then struggled back up over a week or two, so you should be ok with your purchase.
Any expressed market opinion is my own and is not to be taken as financial advice
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