Top 5: Finance & property quotes week commencing 2 March

By the resi financial blog team, 09 March 2015

Top 5: Finance & property quotes week commencing 2 March

In what's turning out to be ongoing theme in the property and finance worlds, commentary shifted to the official cash rate once again this week. Some industry members were disappointed by the Reserve Bank's decision, while further discussion turned to what's coming in the months ahead for the property and lending markets. Here is a round up of some of the top quotes from the week gone by.

#1. The Reserve Bank of Australia (RBA) stuck to its guns this week and decided against changing the official cash rate, leaving it untouched at 2.25 per cent for a further month. However, Governor Glenn Stevens hinted that a further rate cut could be on the cards in the months ahead.

"Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target," he said in a March 3 statement.

#2. The Housing Industry Association declared its disappointment in the RBA's decision, but Senior Economist, Shane Garrett, noted that the Bank should implement an additional cut at its next board meeting.

"Many areas of domestic demand are struggling at this time, with business investment as yet failing to respond to low rates, and unemployment continuing to drift upwards," he said.

"The RBA has strongly hinted today that rates may be lowered in the months ahead. Interest rates should be cut again in April in order to dispel any uncertainty."

#3. Construction activity looks set to continue its record run in 2015, with the first set of building approval figures rolling in from the Australian Bureau of Statistics. These show that numbers grew 1.3 per cent in January, but the Property Council of Australia points out that local governments need to do more to support the building sector.

"However, there is an emerging issue around building approvals not converting to actual starts due to costs, delays and obstructive policy settings," Residential Executive Director for the Property Council Nicholas Proud said.

"What we have here is a golden opportunity for national gains to be achieved in terms of jobs, strong communities and housing affordability when the residential development industry is at its best."

#4. Amidst soaring house prices, research from finder.com.au revealed that the average mortgage price today is more than four times the size of an average income. Michelle Hutchison, Money Expert at finder.com.au, noted that mortgages and salaries had experienced lopsided growth since the 1980s.

"The average mortgage size is almost eight times bigger than it was in 1984, however average salaries have not kept up this pace, increasing by 316 per cent," she said.

#5. With this in mind, the Real Estate Institute of Australia's Housing Affordability report shows that while housing affordability is poor, the proportion of income required to meet rent payments is decreasing - which is great news for renters.

"Rental affordability is now at its best level since the June quarter of 2009," CEO Amanda Lynch said.

Categories: Business Owners, Home Loans