Rate increase sees 2 percent drop out
(9 April 2010 – Australia) This month’s monetary policy meeting outcome of a 0.25 percent increase to the official cash rate, and the passing on of the increase by Australian banks, will result in another two percent of first homebuyers pulling out of the market.
The Reserve Bank of Australia raised rates a further 25 basis points earlier this week to 4.25 percent.
All of Australia’s top four banks were quick to pass on the 0.25 percent increase with Westpac retaining the top spot at 7.26 percent.
ANZ was close behind, increasing their standard variable home loan rate to 7.16 percent and CBA settled on a new rate of 7.11 percent.
NAB remained in the lowest spot announcing a 0.25 percent increase to 6.99 percent.
According to a recent Mortgage Choice survey of Australians planning to purchase their first home before February 2012, the second cash rate rise for 2010 will see another two percent of first homebuyers pull out of the market.
Mortgage Choice senior corporate affairs manager, Kristy Sheppard said, most, if not all, of Australia’s lenders will follow suit regardless of pressure from the government, customers and other parties. Their cost of funding and competition for retail deposits will have a strong influence over this.
The March rate rise saw 2.4 percent of Mortgage Choice’s recent first homebuyer survey respondents back out of purchasing in the next two years and now April’s rate rise will see another 1.8 percent give up, Ms Sheppard noted.
The increase is definitely not a welcome outcome for these potential borrowers but it may be good news for investors and upgraders who are scouring the market for a good deal. Less competition makes purchasing property more attractive for these buyers, Ms Sheppard added.
All of Australia’s top four banks were quick to pass on the 0.25 percent increase with Westpac retaining the top spot at 7.26 percent.
ANZ was close behind, increasing their standard variable home loan rate to 7.16 percent and CBA settled on a new rate of 7.11 percent.
NAB remained in the lowest spot announcing a 0.25 percent increase to 6.99 percent.
According to a recent Mortgage Choice survey of Australians planning to purchase their first home before February 2012, the second cash rate rise for 2010 will see another two percent of first homebuyers pull out of the market.
Mortgage Choice senior corporate affairs manager, Kristy Sheppard said, most, if not all, of Australia’s lenders will follow suit regardless of pressure from the government, customers and other parties. Their cost of funding and competition for retail deposits will have a strong influence over this.
The March rate rise saw 2.4 percent of Mortgage Choice’s recent first homebuyer survey respondents back out of purchasing in the next two years and now April’s rate rise will see another 1.8 percent give up, Ms Sheppard noted.
The increase is definitely not a welcome outcome for these potential borrowers but it may be good news for investors and upgraders who are scouring the market for a good deal. Less competition makes purchasing property more attractive for these buyers, Ms Sheppard added.
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