From CoreLogic’s Cameron Kusher:
This column is going to be a little controversial however, lenders are well within their rights keep a portion of future rate cuts up their sleeve. Furthermore, the fact that banks have to consider mortgage holders as well as savers is an important consideration.
It is true that Australians are obsessed with housing. In no way is this better reflected by the fact that interest rate cuts are cheered because they lead to cheaper interest cost on our mortgages and interest rate rises are jeered because our repayments increase. This is notwithstanding the fact that lower interest rates typically reflect a slowing economy with low inflation and low wages growth that requires more stimulus. On the other side, higher interest rates typically reflect stronger inflation, stronger wage growth and an economy that is overall too strong.
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