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Interest rate cuts don't do nothing; May rate cut failing to stimulate mortgage demand: Loan Market
Topic Started: 25 May 2012, 02:57 PM (4,550 Views)
themoops
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http://www.macrobusiness.com.au/2012/05/australias-paradox-of-thrift/

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From Property Observer today comes news that the 50 basis point cut in official interest rates in May, of which around 35 basis points was passed onto borrowers, has failed to stimulate mortgage demand:
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.
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The Duck
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What other than make repayments easier?

Perthnowhttp://www.perthnow.com.au/business/commbank-drops-rates-by-04-per-cent/story-e6frg2ru-1226366908710

:D
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themoops
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The Duck
25 May 2012, 03:02 PM
People are still deleveraging instead of propping up the ponzi, fool.
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.
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Frank Castle
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Business As Usual

My loan repayments have dropped considerably putting more CASH in my back pocket
Tenants rents going up has added some more

How about your savings mop's?
Have their rate increased or decreased? ;)


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The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
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themoops
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Frank Castle
25 May 2012, 03:12 PM
My loan repayments have dropped considerably putting more CASH in my back pocket
Tenants rents going up has added some more

How about your savings mop's?
Have their rate increased or decreased? ;)


Big deal about your pissy anecdote, which you're probably lying about anyway. The fact is the crash is gathering momentum.
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.
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The Duck
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themoops
25 May 2012, 03:10 PM
People are still deleveraging instead of propping up the ponzi, fool.
So if you don't disagree then why is this thread titled 'Interest rate cuts don't do nothin'?
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peter fraser
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themoops
25 May 2012, 03:17 PM
Frank Castle
25 May 2012, 03:12 PM
My loan repayments have dropped considerably putting more CASH in my back pocket
Tenants rents going up has added some more

How about your savings mop's?
Have their rate increased or decreased? ;)


Big deal about your pissy anecdote, which you're probably lying about anyway. The fact is the crash is gathering momentum.
I agree with the first part of your post, people are not racing out to buy houses, so that should reduce the price of houses.

However, the lower that rates go, the less pressure there is on financially distressed households, and that will save a lot of people, thus meaning less distressed sellers, and that will slow the falls in house prices.

And lastly - if rates fall sufficiently, eventually more buyers will be drawn out as repayments equal rents. Especially if they can lock those rates in for a few years. CBA is now 5.7% fixed.

So it's a mixed bag - some bearish, some bullish. That's life...

Any expressed market opinion is my own and is not to be taken as financial advice
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Admin
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Quote:
 
May rate cut failing to stimulate mortgage demand: Loan Market

By Larry Schlesinger
Friday, 25 May 2012

The Reserve Bank has presented the carrot, but few borrowers appear to be biting, according to mortgage enquiry figures from mortgage broker Loan Market.

Loan Market, part of the Ray White Group, has recorded only a 5% increase in loan enquiries to date in May compared with April.

The Loan Market update follows mortgage comparison website Ratecity.com.au noting that the biggest change in borrower behaviour of late has been an increase in refinancing activity, with 18,000 borrowers refinancing their home loans in March – the highest number of refinanced home loans in one month since April 2008.

Loan Market says the underwhelming response from consumers to date means further stimulus is needed.

“The RBA’s 50-basis-points rate reduction was an essential starting point and with most banks passing on a significant amount of the rate cut, mortgage holders have been able to start better combat the rising cost of living,” says Loan Market corporate spokesman Paul Smith.

“But it looks as if more reductions from the RBA will be needed to make a real impact on the economy, especially in housing and retail.”

“With the situation in Europe deteriorating over the past few weeks again, fresh concerns over the domestic impact of a eurozone collapse will keep consumer confidence reserved and subdued.”

“The RBA has room to take the cash rate down significantly, and we expect to see the official rate lowered again at the central bank’s June meeting,” he says.

A recent Loan Market online poll found almost 80% of consumers were using the benefits from the May rate cut to boost their home loan repayments or increase savings.

Only 2% of respondents were planning to spend the extra cash resulting from the interest rate reduction.

“Further rate cuts are essential to revive struggling sectors such as retail and housing which have been floundering in this two-speed economy,” says Smith.

Read more: http://www.propertyobserver.com.au/mortgages/may-rate-cut-failing-to-stimulate-mortgage-demand-loan-market
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Frank Castle
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Business As Usual

themoops
25 May 2012, 03:17 PM
Big deal about your pissy anecdote, which you're probably lying about anyway.
How could I possibly be lying?

Interest rates dropping mean repayments are less
That means more cash in my (and anyone with a loans) pocket.
Thats a fact

Rents are rising meaning more cash in my pocket
is also a documented fact

You are seriously delusional if you think otherwise :wak:

Quote:
 
The fact is the crash is gathering momentum.

Sure it is mops, you keep telling yourself that :wak:


And I ask again, how has the dropping interest rates helped your savings? ;)
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themoops
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peter fraser
25 May 2012, 03:23 PM
I agree with the first part of your post, people are not racing out to buy houses, so that should reduce the price of houses.

However, the lower that rates go, the less pressure there is on financially distressed households, and that will save a lot of people, thus meaning less distressed sellers, and that will slow the falls in house prices.

And lastly - if rates fall sufficiently, eventually more buyers will be drawn out as repayments equal rents. Especially if they can lock those rates in for a few years. CBA is now 5.7% fixed.

So it's a mixed bag - some bearish, some bullish. That's life...
Might do. But I wonder how the 1.7 million negative gearers are faring. Plus we have a carbon tax starting soon, plus all the happenings in europe.
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.
Profile "REPLY WITH QUOTE" Go to top
 
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