Economists tip another rate cut

CommSec is tipping a further interest rate cut of 25 basis points next month as the central bank today slashed rates by a bigger than expected 75 basis points, a move welcomed by various lobby groups across the country.


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Great news for mortgage holders, they will save thousands in repayments. I do feel bad for the would be buyers sitting on the fence. They have been tricked into believing rates will go up into double digits and prices falling by up to 40% at the time when the banks would have lent them money. Now the banks have tightened the lending criteria and it turns out the rates are falling and on their way to the lowest they ever been while the ABS reported price falls in the June quarter were wrong and prices actually went up 1%. Little wonder the prospective buyers are stunned, frozen in their tracks and in complete denial. While before the banks would have lent them 100% of the loan they are now demanding up to 20% deposit which is a bit hard to save. The bears are having a fit and given that another rate cut is on the cards comparing our market to US or UK is the only thing they can hang on to at the moment.

Don't worry John, it won't be long... like most Australians, the RBA provides a 0.75% cut to over inflated rates by OECD standards, and the homeowners rejoice and run out and buy a 200k yacht. The Australian housing market is unsupportable at the current prices. These people who keep calling it a market, but whom only believe that prices can rise are in for a rude shock. Us perspective homeowners are watching from a far, earning hard currency and waiting for the right opportunity. Believe you me, it is not so far away... ;) Once Rudd finally pulls the support from this 'market', then I will drop in for a cup of tea...

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