Who’d be Australian under the age of 40? You can’t rent and very soon property prices will be taking a dump on you as well.
The rate cuts are coming:
Commonwealth Bank, the country’s largest mortgage lender, has slashed its fixed-rate borrowing costs, in a move that will add further momentum to a post-Easter residential market picking up faster than many analysts expected.
CBA cut its 3-year fixed rate packaged loan for both owner occupiers and investors on Friday by 0.4 per cent to 5.59 per cent and 5.69 per cent respectively. This followed similar moves by 15 smaller lenders and non-banks in cutting their fixed mortgage rates in the past two weeks.
Fixed mortgage rates are a good guide to what the banks see as the future of interest rates. The three-year bond yield is already down hard from 3.8%:
Cash rate futures see two rate cuts within 18 months:
Three-year CDS is at 36bps so there is some spread for CBA to play with in these fixed-rate cuts.
I still think we’re more likely to see a recessionary environment and deeper cuts.
Which will be no better for Aussie youth as house prices skyrocket.
But then, children are bludgers.
