RBA To Consider Rate Cuts In 2015

The Reserve Bank has discussed the possibility of further rate cuts for next year, according to the recent release of their December 2 meeting – their last for the year.

The RBA decided to keep the interest rate at 2.5%, believing that this is enough to stimulate growth in the economy. However, further policy easing may take place early 2015 depending on the performance of key economic factors, such as the Australian currency and the inflation rate. The board members also agreed that the low interest rates have supported strong activity in the housing sector and that it is necessary to keep the rates at the current rate – and possibly lower, to support the strong market demand.

Read more about this on the Smart Property Investment website.

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More Lenders, More Instability: RBA

The Reserve Bank has expressed concerns about the growing number of mortgage lenders in the market, calling it a risk to the financial system as it generates more credit into the housing sector.

80% of the home loan market is controlled by the big four banks: the National Australia Bank, the Commonwealth Bank, Westpac and the Australia and New Zealand Banking Group. Smaller lenders are slowly giving them a run for their money as they call upon the government to take the necessary measures to level the playing field. The RBA has cautioned against any policies that will boost home loan competition as this can come at the expense of financial stability, stating that the country has a sufficient stream of mortgage supply.

Read more about this on the Sydney Morning Herald website.