It’s unlikely to come today, but the Reserve Bank of Australia is getting closer to moving Australia’s official cash interest rate... Moody's predicts a rise in Australian mortgage delinquencies...
RBA cash rate moves closer
It’s unlikely to come today, but the Reserve Bank of Australia is getting closer to moving Australia’s official cash interest rate.
The first monthly Finder Reserve Bank survey for 2016 has 29 experts in agreement that the RBA won’t touch the cash rate during this afternoon’s board meeting; however there is growing sentiment that change is on its way.
More than a third of the experts surveyed believe the RBA will announce a rate rise sometime in 2016, while 52% of respondents predicted a rise in 2017.
Having sat unchanged at 2% since May 2015, it appears the cash rate may have hit the low point of its current run; with only 24% of respondents believe there will be any further rate reductions this year.
While he doesn’t believe the RBA will move the cash rate this afternoon, Shane Oliver, chief economist at AMP Capital, believes economic conditions may force the central bank to make a downward move in the near future.
“I think that given the emerging softening in the housing cycle, the ongoing mining downturn and renewed global market turmoil that the risks to growth are on the downside and given very low inflation the RBA should ease again. But I don't think it's convinced just yet,” Dr Oliver said.
But prominent economist Saul Eslake said there has been no real change since the RBA’s latest meeting that would warrant any movement.
“Nothing has happened since the last meeting to warrant a change in monetary policy settings,” Mr Eslake said.
In depth: MPA’s Young Guns 2016 revealed!
Moody's predicts a rise in Australian mortgage delinquencies
Melbourne moves ahead as capital growth leader RBA cash rate moves closer Expert urges quick decisions from owners looking to cash in
Changing economic conditions at home and abroad will result in an increase in the number of Australian mortgage delinquencies in the coming year according to one credit rating firm.
According to the latest monthly review of the performance of Australian prime residential mortgages by ratings firm Moody’s, delinquencies in excess of 30 days rose to 1.20% in November 2015 from 1.14% in October 2015.
Moody’s puts that monthly decrease down to seasonal factors such as household overspending in the run up to Christmas, but still believes 2016 will see a higher number of delinquencies than 2015.
"The housing market has shown signs of cooling over recent months," Moody’s assistant vice president – analyst Alana Chen said.
"Strong housing market activity in both Sydney and Melbourne helped foster relatively strong economic performance in the respective states of New South Wales and Victoria in 2015," Chen said.
"But a slower pace of house price growth will mean a slowdown in economic activity and will contribute to a deterioration in mortgage performance in 2016 from current exceptionally healthy levels,” she said.
Moody’s predicts the slower price of house growth will continue as the Australian economy faces some challenges through 2016.
In depth: A few questions to turn around refinance reluctance
It’s unlikely to come today, but the Reserve Bank of Australia is getting closer to moving Australia’s official cash interest rate.
The first monthly Finder Reserve Bank survey for 2016 has 29 experts in agreement that the RBA won’t touch the cash rate during this afternoon’s board meeting; however there is growing sentiment that change is on its way.
More than a third of the experts surveyed believe the RBA will announce a rate rise sometime in 2016, while 52% of respondents predicted a rise in 2017.
Having sat unchanged at 2% since May 2015, it appears the cash rate may have hit the low point of its current run; with only 24% of respondents believe there will be any further rate reductions this year.
While he doesn’t believe the RBA will move the cash rate this afternoon, Shane Oliver, chief economist at AMP Capital, believes economic conditions may force the central bank to make a downward move in the near future.
“I think that given the emerging softening in the housing cycle, the ongoing mining downturn and renewed global market turmoil that the risks to growth are on the downside and given very low inflation the RBA should ease again. But I don't think it's convinced just yet,” Dr Oliver said.
But prominent economist Saul Eslake said there has been no real change since the RBA’s latest meeting that would warrant any movement.
“Nothing has happened since the last meeting to warrant a change in monetary policy settings,” Mr Eslake said.
In depth: MPA’s Young Guns 2016 revealed!
Moody's predicts a rise in Australian mortgage delinquencies
Melbourne moves ahead as capital growth leader RBA cash rate moves closer Expert urges quick decisions from owners looking to cash in
Changing economic conditions at home and abroad will result in an increase in the number of Australian mortgage delinquencies in the coming year according to one credit rating firm.
According to the latest monthly review of the performance of Australian prime residential mortgages by ratings firm Moody’s, delinquencies in excess of 30 days rose to 1.20% in November 2015 from 1.14% in October 2015.
Moody’s puts that monthly decrease down to seasonal factors such as household overspending in the run up to Christmas, but still believes 2016 will see a higher number of delinquencies than 2015.
"The housing market has shown signs of cooling over recent months," Moody’s assistant vice president – analyst Alana Chen said.
"Strong housing market activity in both Sydney and Melbourne helped foster relatively strong economic performance in the respective states of New South Wales and Victoria in 2015," Chen said.
"But a slower pace of house price growth will mean a slowdown in economic activity and will contribute to a deterioration in mortgage performance in 2016 from current exceptionally healthy levels,” she said.
Moody’s predicts the slower price of house growth will continue as the Australian economy faces some challenges through 2016.
In depth: A few questions to turn around refinance reluctance
