Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Interest rates about to fall, says leading analyst

Staff Reporter 4 minute read

The markets now think it is a "dead certainty" that the Reserve Bank of Australia will cut interest rates by April.

The official cash rate has remained at a record-low 2.5 per cent since 2013, but both Westpac and NAB forecast last month that the cash rate would fall to at least 2.0 per cent in 2015.

SQM Research property analyst Louis Christopher is the latest expert to forecast a rate cut this year, saying a trigger would occur if APRA imposes investor lending restrictions.

"They will do this in an attempt to reduce risky, speculative investor behaviour, particularly from those who should not be taking on large amounts of housing debt due to their limited capacity to pay it back," Mr Christopher said.

Advertisement
Advertisement

"However, if APRA does move, it could potentially open the way for the Reserve Bank to make rate cuts, possibly more than the standard 25 basis points.

"It's clear to most the economy is weak, and if it wasn't for the threat of a national surge in house prices, rates would most likely be lower today."

Mr Christopher added that the markets "think it's a dead certainty rates are going to be cut by April 2015" and expect another reduction in June.

"If such rate cuts happen, housing markets would be boosted throughout the course of the calendar year, with most cities recording growth at the top end of our forecast ranges," he said.

[Related: RBA gives first hint of 2015 rate cut]

PROMOTED CONTENT


Interest rates about to fall, says leading analyst
default
TheAdviser logo

If you have ever considered how you could better service your SME clients but lack the knowledge or confidence to do this beyond referring them on, this is a must-attend event for you. Don't miss SME Broker Bootcamp, a jam-packed, free-to-attend, practical workshop. Register today and secure your place at this interactive, flexible, must-attend event.

default

 

more from the adviser
tech tools

Breaking News

FICO launches new loan-origination platform

The US analytics company has launched a new digital loan originat...

Liberty A League partnership ta

Breaking News

Liberty scores A-League Women’s football naming partnership

The non-bank lender has become the official naming partner of the...

house sold

Breaking News

Hot Property: The biggest property headlines from the week 29 November - 3 December

The weekly round-up of the biggest news stories from across Momen...