Mortgage broker calls RBA cuts 'too little, too late'

Kevin Farmer

A SURPRISE dip in home loan approvals highlights how the interest rate cuts by the Reserve Bank of Australia (RBA) have proven to be too little and too late to lift the Australian home finance market, according to mortgage broker network 1300HomeLoan.

1300HomeLoan managing director John Kolenda said the ABS housing finance figures for November, 2012, fell 0.5 per cent despite market expectations of a 0.5% rise.

He said the disappointing result came after the RBA kept its cash rate on hold in November before deciding to reduce it 25 basis points to 3% in December.

"The RBA has been messing around with the cash rate for the past few years and for most of that time they have got it wrong," he said.

"I believe the official rate is still half a percentage point above what it should be.

"What was needed during 2012 was bold action by the RBA but what they delivered was too little, too late.

"It will be no surprise to see the RBA board lower rates again when they meet next month and we have some commentators predicting rates could go as low as 2% this year.

"I still think more rate cuts from the RBA will help keep the market active although there are other factors which are also influencing consumers."

Mr Kolenda said the domestic economy has been subdued by lack of confidence and cost of living considerations such as rapidly rising utilities prices, food prices and even insurance.

"Consumers have been battered with gloomy economic news for a few years and they weren't helped by the RBA raising interest rates seven times during 2009/10 after taking the cash rate down to 3% in response to the global financial crisis," he said.

"With continuing concerns over the global economy conditions, the threat of a mining slow down, retailers hurting, no property price growth and with unemployment expected to rise the outlook is poor."

Topics:  market rate cuts rba

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

The bargain trail comes to the Lockyer Valley

NEIGHBOURS: Sandra Hudspith, Rochelle Price, Kathy King and Abby Graham at their garage sale.

The Lockyer Valley welcomed the 2016 Garage Sale Trail.

Safety fears for kids waiting for bus by busy road

DANGEROUS: There is no designated bus stop off the busy Gatton-Laidley Road.

Concerns have been raised for school children catching bus.

Local Partners

Multiple fires along the Warrego Highway

SIX firefighting crews are currently on scene at a grass fire on the Warrego Highway.

WATCH: NASA space station is live, see the view from above

In this picture taken from NASA's International Space Station from April 2015, the SpaceX Dragon is captured with the 57.7-foot-long Canadarm2 robotic arm before its installation to the Harmony module.

See the world from a new perspective as space station passes Rocky

Community garden set for Palmwoods

Kay Nixon at the Palmwoods Community Gardens will be hosting a launch day and inviting the ecommunity to come along and sign up.

Parcel of land to supply sustainable gardening for community

Barry Gibb is coming to Bluesfest 2017

FANS: Barry Gibb talks to a fan next to a cardboard cutout of his young self.

Aged 70, Gibb has re-launched his solo music career with a new album

The Bachelorette fans rally around devastated Matty J

The Bachelorette runner-up Matty Johnson.

CALLS for reality dating show's runner-up to be the next Bachelor.

RECAP: The Bachelorette S2E12 - the finale

Georgia Love pictured in a scene from The Bachelorette finale.

GEORGIA chooses Lee and leaves Matty J heartbroken.

The Bachelorette finale: Georgia declares her love for Lee

Georgia Love with The Bachelorette winner Lee Elliott.

MATTY J left heartbroken in emotional grand final.

Buy your own brothel: Scarlet Harem for sale

OPPORTUNITY KNOCKS: The Coast's first brothel, Scarlet Harem at Kunda Park, is up for sale.

Coast brothel madam sells up

Tom Cruise credits success to Scientology

Tom Cruise

Tom Cruise credits his success to Scientology

Hacksaw Ridge leads AACTA Awards nominations

Andrew Garfield and Teresa Palmer in a scene from the movie Hacksaw Ridge.

MEL Gibson's wartime drama opens in cinemas next week.

Want to own one of Australia's best restaurants?

TOP GONG: Mooloolaba Spice Bar has been named in TripAdvisor's Top 10 Australian restaurants for 2016.

Here's your chance to pick up one of the Coast's favourite eateries

Tough times in CBD: Woolies says goodbye Ipswich

Woolworths in the Ipswich Mall.Photo: Rob Williams / The Queensland Times

The last day of trading will be January 1

Look at me! Kath and Kim home up for sale

Kath and Kim from the iconic Aussie TV series.

'Crack open the Baileys and grab a box of BBQ Shapes'

How to fit 100,000 new homes on the Coast

Property, real estate, housing, suburb,  August 2016

Fitting 2m extra people in south-east Qld in 25 years a balance

Hinterland horse stud passed in for $8.25 million

UNREAL: This Maleny estate is incredible.

12-bedroom hinterland horse stud still available

Hit songwriter's Noosa mansion on market

SPECIAL PLACE: The Cintamani estate is going to tender, marketed by Tom Offermann Real Estate.

Is this Queensland's best property?