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Brokers divided on rate outlook

by James Mitchell4 minute read
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Mortgage brokers appear to be split on whether the Reserve Bank will cut rates again in 2017.

A current straw poll by The Adviser has 54 per cent of brokers saying that the RBA will not cut rates next year, while 46 per cent believe the cash rate will be cut in 2017.

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Predictions for next year’s monetary policy have varied widely in recent weeks, with some economists tipping multiple rate hikes while others believe another cut could be on the cards.

Regardless of what the central bank decides to do, the general consensus is that banks will continue to hikes rates out-of-cycle.

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A recent survey by HashChing found that 79.37 per cent of brokers believe the big four banks will make out-of-cycle rate increases in 2017.

Additionally, the HashChing survey showed that 68.25 per cent of brokers consider the ‘Trump effect’ will likely have an impact on interest rates next year.

“It’s clear that market sentiment is starting to shift,” HashChing CEO Mandeep Sodhi said.

Mr Sodhi said “general market buoyancy” and the strength of the housing sector are creating an environment for multiple rate rises in 2017.

“The continued strength and relative optimism of the local share market off the back of the Trump victory in the US will have a flow-on effect to the Australian housing market,” he said.

[Related: Flavell warns of further rate hikes in 2017]

Brokers divided on rate outlook
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James Mitchell

James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

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