Top 5: Finance & property quotes week commencing January 26

By the resi financial blog team, 02 February 2015

Top 5: Finance & property quotes week commencing January 26

In anticipation of the Reserve Bank of Australia (RBA) reconvening on February 3, industry commentators have been talking about whether there will be a change to the rate and which way it might go. While the RBA recommended a sustained period of interest rate stability at their last  meeting, changes since then have sparked many conversations about whether or not this is likely to remain the case.

#1. The Real Estate Institute of Australia (REIA) noted that the consumer price index returned results in the December quarter well below the RBA's target zone of 2-3 per cent inflation. In fact, Neville Sanders, president of the REIA, said that the annual rate of 1.7 per cent left plenty of room for stimulation through a drop in the cash rate.

"With inflation under control combined with a slow down in housing finance, it's appropriate that the RBA Board seriously considers a cut in interest rates at their meeting next week," Mr Sanders said on January 28.

#2. A similar view was held by the Housing Industry Association (HIA), citing easing price pressures, particularly those influenced by the cost of oil. However, the HIA was more emphatic about the need for economic stimulation.

"The big drop in oil prices over recent months is helping to restrain cost of living pressures. Fewer price pressures in the economy mean that a policy of very low interest rates is both justified and necessary. This is against the backdrop of below trend economic growth and unemployment persistently above 6 per cent," said Shane Garrett, senior economist for the HIA in a January 28 statement.

#3. Giving voice to the uncertainty in the market at the moment, Michelle Hutchison, money expert at finder.com.au, spoke to the fact that there is no firm indication amongst experts when exactly a rate change could be expected, but that it should be expected this year.

"While it's unclear which direction the cash rate will move, it's very likely that we will see some movements this year, with many of the experts citing factors including falling oil prices and the Australian dollar, lower consumer confidence and an uncertain unemployment outlook," Ms Hutchison said on January 31.

#4. The Gateway WA Project, funded jointly by the Australian and the Western Australian governments, has passed the half-way mark ahead of schedule. The project is set for completion in the middle of next year.

"This is another example of two adult governments working together to build world class infrastructure that will create thousands of new jobs, slash travel times for motorists and help unlock the economic capacity of Western Australia," said Jamie Briggs, Assistant Minister for Infrastructure and Regional Development, in a January 28 release.

#5. The Victorian government has recently announced the abolition of the state's building code, which has prompted the Australian Constructors Association (ACA) to bring the Federal Industrial Relations legislation to the fore, which is currently before the Australian Senate.

ACA Executive Director Lindsay Le Compte noted that the removal of the industry guidelines in Victoria highlights the need for national standards to regulate the industry and provide confidence to consumers and practitioners alike.

"The industry needs to have a clear, consistent and effective regulatory framework to ensure that lawlessness and unproductive activities are prevented from flourishing on construction sites," Mr Le Compte said in a January 27 statement.

Categories: Home Loans, Property Investment