Forums / Community / Opinionated! / Poll: Where do you expect the RBA’s cash rate to be in 12 months?

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  • Profile photo of BennyBenny
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    @benny
    Join Date: 2002
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    Where do you expect the RBA's cash rate to be in 12 months?


    Hi all,

    This thread is for discussion of this poll. Please submit your vote and your thoughts on why!

    Benny

    Profile photo of BennyBenny
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    @benny
    Join Date: 2002
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    With the Cash Rate currently at 2.0, I don’t see it going much lower – maybe just one more tick….

    But then, I’d not want to see it crank up again too quickly. So, down 0.25 then back up a similar amount?

    Voting for the status quo over 12 months. What say you?

    Benny

    Profile photo of David HallDavid Hall
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    @wiggles2
    Join Date: 2014
    Post Count: 64

    The RBA may lower rates over the next 6-9 months. It won’t make much difference however as the banks will keep the bulk of it for them selves, whilst still raising interest rates to investors to cover the loss of profit from the decline in lending to the investment sector.

    David Hall | Momentum Wealth
    http://www.momentumwealth.com.au/
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    Buyers Agent

    Profile photo of DeanCollinsDeanCollins
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    @deancollins
    Join Date: 2015
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    I’ve been surprised how much the USA financial talking heads have been commenting that Yellen might push off the September 0.25% rise until December (or later), is it concerning to anyone else that the market feels so week that a 4% devaluation in the Yuan is such a big deal….eg. is the economy more in the toilet than us mere mortals are being led to believe.

    Whats the take by the Australian media/business world on what this means for Australia?

    Lol any local articles about poor Chinese now having to pay 4% more for their overseas investment properties?

    Profile photo of Adelaide Buyer's AgentAdelaide Buyer’s Agent
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    @ipcproperty
    Join Date: 2015
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    Down and down! IMO the APRA changes have been put in place assuming that interest rates are going to continue to be forced down… but house prices would continue to soar on the East Coast if investment property lending wasn’t stemmed and hence why the tougher APRA standing on investment property lending

    Adelaide Buyer’s Agent | Independent Property Consulting Adelaide
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    Stefan Miraglia - The Adelaide Buyer's Agent from Independent Property Consulting

    Profile photo of RedwoodRedwood
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    @redwood
    Join Date: 2013
    Post Count: 340

    Strong view with the banks that there will be a 25 basis point decrease in November – I’m inclined to agree.

    Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
    http://redwoodadvisory.com.au
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    SMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Once upon a time, bank interest rates were closely tied to, and tracked the RBA cash rate. This has not been the case lately.

    Irrespective of whether the RBA lowers the cash rate, it does not directly follow that the banks will do the same (particularly in the case of investment loans and fixed rate loans).

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of BennyBenny
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    @benny
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    “Once upon a time, bank interest rates were closely tied to, and tracked the RBA cash rate.”

    So true, Jacqui. I watched (in horror) as the gap steadily widened after the GFC hit. What had hitherto been a 1.3% gap quickly became 2%+ Nice work if you can get it – become a Bank.

    And, much like RE agent’s fees (where the 2.5% commission was once the MAXIMUM commission that could be sought, but now it is accepted widely as normal to charge the lot) the “new normal” should see Banks continuing with their golden hands more deeply in our pockets for some time. Short of some other “upstart” bank adding some heat by under-cutting the others, I’d think those margins will remain high for quite some time, and especially while the rates remain so low.

    Benny

    Profile photo of DeanCollinsDeanCollins
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    @deancollins
    Join Date: 2015
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    Agree Benny, this whole APRA 10% investor limit is being used as a rort by the banks to push up their profit margins.

    Profile photo of JohnJohn
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    @blackhat80
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    Im thinking 50 basis points lower in 12 months, not that it will all be passed on, especially to investors.

    Profile photo of Corey BattCorey Batt
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    @cjaysa
    Join Date: 2012
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    Agree Benny, this whole APRA 10% investor limit is being used as a rort by the banks to push up their profit margins.

    Meanwhile they forcefully shed market share and have reduced profitability from higher deposit requirements.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of BennyBenny
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    @benny
    Join Date: 2002
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    Well, here we are twelve months later – Seems I was too conservative in my outlook…. How did you fare?

    We were at 2% Cash Rate in August last year, and I was saying status quo, or maybe one tick lower. Blew ME out of the water, as we are at 1.5% now, and still some bias toward getting lower.

    I wonder what other polls are now 12 months down the track…. Hmmmm….. ;)

    Benny

    Profile photo of DeanCollinsDeanCollins
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    @deancollins
    Join Date: 2015
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    Nice work if you can get it – become a Bank.

    Interestingly…..I’ve take that advice to heart :)

    Still not official yet but I’m a 1% foundational shareholder of an offshore bank planning to do exactly that….!!

    The irony that comes from St George knocking back expats working overseas on their portfolio loans might actually cost them more than they think…..

    Profile photo of BennyBenny
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    @benny
    Join Date: 2002
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    Hi Dean,

    The irony that comes from St George knocking back expats working overseas on their portfolio loans might actually cost them more than they think…..

    I N T E R E S T I N G !!!!

    You will be keeping in touch, no doubt? Good luck with it,

    Benny

    Profile photo of DeanCollinsDeanCollins
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    @deancollins
    Join Date: 2015
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    Hi Dean,

    The irony that comes from St George knocking back expats working overseas on their portfolio loans might actually cost them more than they think…..

    I N T E R E S T I N G !!!!
    You will be keeping in touch, no doubt? Good luck with it,
    Benny

    I’ll be sure to post back here early next year with the details however because of Australian regulations loans will only be able to be written for expats offshore (I know what a weird quirk……can be written against Australian property…..but only if you don’t reside in Australia).

    I figure my wife wasn’t the only one getting screwed over by St George so when the investment memorandum proposal crossed my desk I was happy to chip into their initial foundational funding round.

    Profile photo of Jason StaggersJason Staggers
    Participant
    @jason_staggers
    Join Date: 2006
    Post Count: 61

    I’ll go on record to predict 1.0 percent by the end of this financial year :)

    But not without some help from APRA…

    Jason Staggers | PropertyInvesting.com
    http://propertyinvesting.com
    Email Me

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
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    What sort of “Apra” help are you proposing?

    Profile photo of Jason StaggersJason Staggers
    Participant
    @jason_staggers
    Join Date: 2006
    Post Count: 61

    I expect the Fed to cut rates back to zero, which would put pressure on the RBA to continue cutting rates. But that could continue to fuel home price rises, so APRA will need to help out by preventing an excessive amount of new credit from flowing into housing. This would come in the form of capital controls of sorts on banks.

    Jason Staggers | PropertyInvesting.com
    http://propertyinvesting.com
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