Resources: Market Update

The Reserve Bank of Australia (RBA) has for the fourth consecutive month left the official cash rate on hold at a 49-year low of three per cent.

Glenn Stevens RBA Governor in a statement said "Economic conditions in Australia have been stronger than expected...  Measures of confidence have recovered a good deal of ground.

"This suggests that the risk of a severe contraction in the Australian economy has abated."

"The board will continue to monitor how economic and financial conditions unfold and how they impinge on prospects for sustainable growth in economic activity and achieving the inflation target."

Homeowners should begin to brace themselves as an interest rate rise could be on the cards later in the year.


STILL A SHORTAGE OF NEW HOUSING

Posted 12/08/09 

In its Monetary Policy on Friday the Reserve Bank of Australia (RBA) said according to data from the Australian Bureau of Statistics (ABS) ¾ quarters of applications for first home buyer grants have been for existing dwellings since the grant was increased in October.

The RBA highlighted the shortage of new housing as first home buyers and investors set their sights on existing property rather than new homes.

The RBA Monetary Policy statement said "the prospective boost to housing construction has so far been less apparent in building approvals"

According to the ABS, lending to first home buyers fell to 27.1 per cent in June, from 28.5 per cent in May. The average loan size for first-home buyers decreased by $11,600 to $270,200 in the same period.


CBA & WESTPAC MOVE ON FIXED RATES.

Posted 12/08/09 

The Commonwealth Bank of Australia (CBA) yesterday confirmed it will be lifting their fixed rate mortgages by as much as 60 basis points and that long-term funding costs were to blame for the rate hike.

CBA's two year and four year term loans will rise to 6.54 per cent and 7.59 per cent respectively.

This is the second time in four months that the CBA have raised rates outside the Reserve Bank.  In April fixed rate loans were increased between 20 basis points and 45 basis points.

Last week Westpac raised their fixed term home loan interest rates by up to 45 basis points.