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interest rate cut

Discussion in 'Property Market Economics' started by MTR, 1st Aug, 2016.

  1. MTR

    MTR Well-Known Member Premium Member

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    likely to see interest rate cut tomorrow?

    Fingers crossed
     
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  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Half of bngger all, won't make much of a difference to repayments.
     
  3. Coota9

    Coota9 Well-Known Member Premium Member

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    That's if the banks pass on the full cut if indeed the RBA does reduce rates..
     
  4. Barny

    Barny Well-Known Member

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    100% cut.

    I have a new formula says so.
     
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  5. Skilled_Migrant

    Skilled_Migrant Well-Known Member

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    What is the point in interest rate cut when:
    • All the extra money will just be soaked up by property leaving the remaining economy untouched. The only improvements will be in median prices and serviceability of a few investors.
    • RBA will mostly be undoing what APRA has done.
    • There is hardly anything remaining in RBA's tank, when we get close to zero.
     
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  6. Biz

    Biz Well-Known Member

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    1% increase today!
     
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  7. HUGH72

    HUGH72 Well-Known Member

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    Well we know how much you hate NGing, so there is a silver lining because if the rate cuts keep coming NGing will disappear.

    No government policy intervention and more tax revenue.
    A win win situation.
     
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  8. craigc

    craigc Active Member

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    Market expectation is around 60% chance of cut. So who knows.
     
    Last edited: 2nd Aug, 2016
  9. Skilled_Migrant

    Skilled_Migrant Well-Known Member

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    Not a win win, there are losers (savers, banks and their share holders, super, FHBs, business and consumer confidence...)

    No case for a rate cut

    But, as former Reserve Bank governor Ian Macfarlane told The Australian Financial Review, the 2-3 per cent target was designed for a different era: when inflationary expectations needed to be "anchored" after being clubbed by the early 1990s recession. No-one imagined it could be used to drive interest rates close to zero just to induce inflation up into the target zone. That surely would be mindlessly mechanical.

    Rate cuts have largely been ineffective as cheap credit (< 2.5%) has been available for three years now. Why would it be any different now.

    What is the plan when we hit zero ? IMHO Fiscal policy is the final solution and the quicker it happens the better.
     
  10. MTR

    MTR Well-Known Member Premium Member

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    market sentiment, may get more buyers jump in? I think this is what happened with last IR fall
     
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  11. willair

    willair Well-Known Member Premium Member

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    Maybe read up on what's happened in Japan and the country's real GDP,and the effects it would have on this country..
    But watching the way the perfectly transparent "AD" is trading over the past few hours ,i think rates will stay the same..
     
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  12. JDP1

    JDP1 Well-Known Member

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    Dunno about a cut. I'm 60-40 on a cut. But either way, I'm 100% sure the banks wont pass all of it on.
     
  13. Perthguy

    Perthguy Well-Known Member

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    I agree. The cost of lending would have to fall for an interest rate cut to be passed on. That doesn't automatically happen just because official interest rates are cut.
     
  14. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    I like cuts for personal reasons as much as the next guy, but what I'd really like to see is rates going up. Dropping rates when they're already low is a sign of a sick economy and that's not good for anyone in the long run. It doesn't matter how low your rates are, you can't afford the repayments if you don't have a job.

    Rates increasing is a sign of an improving economy which leads to business and employment growth, then wage growth. In turn this leads to better housing affordability without a market crash.

    Endless low rates simply leads to stagnation and even deflation.

    I'm hoping that the RBA will keep rates where they are and working with the broader government to find ways to have reason to increase rates in the future.

    I also wish for world peace.
     
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  15. Perthguy

    Perthguy Well-Known Member

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    When is the announcement? #lazyweb
     
  16. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    2 or 3 pm I think.
     
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  17. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    Lunchtime today - WST

    Prediction is rates will stay on hold and cut in the next few months with banks passing on some of it.
     
    Last edited: 2nd Aug, 2016
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  18. craigc

    craigc Active Member

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    2:30 pm announcement
     
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  19. Balman

    Balman Well-Known Member

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    0.25% cut
     
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  20. Perthguy

    Perthguy Well-Known Member

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