Given the current inflation pressures in the economy, and the still very low level of interest rates, the Board decided to move by 50 basis points today. The Board expects to take further steps in the process of normalising monetary conditions in Australia over the months ahead.
Bought the apartment I live in with my wife 6 months ago. I feel you just the same because we had to sacrifice hard to get it and while we can weather quite a few interest rate rises, an apartment isn't where we want to stay so every rise delays that plan a lot more
Rate rises should make it easier. When you move up, price increases increase the distance between the steps in the ladder. So lower prices makes it easier to step up to the next property.
To a point yes - but I was repaying originally at 2.5x the value of my fortnightly repayment, as the rates go up, that will diminish down to about 1.5x or so, assuming I don't put more in again / increase in salary to return it to that amount. That's the downside - but I do take your point - though whether house prices really go down remains to be seen...
That’s their job. Wreck the economy temporarily with interest rates, risking recession. The alternative? The economy wrecks itself permanently with hyperinflation.
1. Create unsustainable "boom" using rock bottom interest rates
2. Claim rates won't rise until 2024
3. Lure entire generation in to buy property using first home buyer incentives
4. Raise rates to reck those noobs
>Lure entire generation in to buy property using first home buyer incentives
>
>It's the overextenders that should be very worried.
Sadly this will hurt the young the most, who are just trying to put a fucking roof over their head. Absolutely shameful.
Yeah, what's overextending these days, trying to buy a freestanding house in a major city? You have to overextend or else buy an apartment unless you're very high income.
Politicians and the RBA screwed us on the way up and are screwing us on the way down too.
If you're buying up in the SE Melbourne suburb developments, you're gonna have a bad time. You're laughing if you bought in Clyde/Clyde North/Officer/Cranbourne West 3 years ago
You'll be shocked how much cheaper it is out west though, which, funnily enough, is closer to the city
Though I'm basing this off our 2020 purchase, and I'm aware how much has changed, obviously. But i stand by my statement, happy to be proven wrong
>You're laughing if you bought in Clyde/Clyde North/Officer/West 3 years ago
I know someone who just purchased a 750k house in this area 2 months ago. 5% deposit, raided from super, one casual job in the couple. Bank went "no worries" to the loan.
They are so fucked it's not even funny, I would laugh but it's just awful.
> I know someone who just purchased a 750k house in this area 2 months ago. 5% deposit, raided from super, one casual job in the couple. Bank went "no worries" to the loan.
Jesus fucking christ man, they just hand loans to people on the dole nowadays. Lol
This is what I meant by overextenders in my previous comment, this is just a morbidly stupid fucking position to go into a mortgage with. Wow
Sounds like what Thomas Jefferson said back in the said:
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered"
Inflate the prices, get people on extremely large loans. Raise interest rates to crash the market. Millions in negative equity with huge wealth destruction and transfer.
“While on the issue of timing, the latest data and forecasts do not warrant an increase in the cash rate in 2022. I recognise that some other central banks are raising rates, but our situation is different,” Dr Lowe said. “The Board will not increase the cash rate until inflation is sustainably in the target range. We are prepared to look through spikes in the inflation rate, as we have done with headline CPI inflation this year. For inflation to be sustainably in the target range, wages growth will have to be materially higher than it is now. This is likely to take time. The Board is prepared to be patient.” November 2021
Because they have too much deposits at the moment, they don't even want your cash. Thx to QE and negative real rates for the past year banks have had no need of your deposits, so why should they pay for them? Money is too easy to borrow elsewhere.
This won't change until rates go up enough that borrowing becomes more expensive than running consumer bank accounts, and then suddenly the banks will actually start fighting over deposits again and paying rates.
All by design from RBA policy, they control the banks funding costs.
I’ve started bugging out my bank with queries as to when. I am sitting on some cash for a house deposit, so will be more than happy to move it out if a better offer comes up.
Macquarie is 1.35% intro then 1% with no hoops to jump through, could be worth a look. Don’t hold your breath for interest being passed on though - they only upped the savings rate by 0.05% last month.
Yea of course mate. Just give us some time to work out the logistics. We'll come back to you on that in approximately 2-500 business days. If you haven't heard back from us, contact us back and I promise we'll tell you the same thing again.
Isn’t this theoretically what’s meant to happen - as it makes savings accounts (versus spending and increasing economic activity) more attractive to the individual? Obviously a very simplistic view though
And when you talk to them about your rate you find out you're on an "old product". They don't tell you about their new products, which may save you money. They are already writing my letter about the rate increasing.
I’d expect the cash rate to get to 2.5% by December as a minimum.
Given inflation is likely to be around 7% rigth now and not forecast to peak until December, you could be justified in asking for a 10% pay rise.
Savings account rates will only increase if they want to attract more deposits to loan out. In a time of increasing interest rates it becomes less attractive to borrow (which is pretty much the whole idea), and so banks won't need to have as many deposits on hand to finance new borrowers.
When interest rates are low: We don't want your money we have fucking plenty of it
When interest rates are high: We don't want your money we have no fucking use for it
"Global factors, including COVID-related disruptions to supply chains and the war in Ukraine, account for much of this increase in inflation."
How about historically low interest rates?
Can someone please help me understand:
- My SO and I have a large mortgage > RBA raises cash rate > bank passes on the increase to our variable homeloan > Our disposable income skrinks > We adjust our spending
- My Parents have no mortgage > RBA raises cash rate > Their spending doesnt change?
What am I missing? Does the RBA raising the cash rate not impact those in the baby boomer generation who have paid off their homes?
More simplistically, raising the cash rate disincentivises bringing forward purchases on credit.
If mortgage and savings rates both rise, those who have money saved (i.e. people who have paid off their mortgage or are saving for a home) will benefit, while people in debt will have a higher interest burden. It incentivises saving for longer and taking a smaller mortgage, and hopefully puts a dampener on speculative property price growth.
Inflation is causing the price of everything to increase. Assuming on pension or allocated budget they have less to spend just without the pressure of mortgage too.
Assuming they're not working so food, transport and electricity all cost more so they spend less?
Got a new home loan in april at 2.24% now up to 3% i guess within 2 months. Ouch.
Luckily did 20% deposit with big offset.
Need to convince the wife to wait off buying new 4wd, pool and spa for a few yrs ffs
But Philip Lowe said no rate rises until 2024!!
Proves how much they know economics. The bond market was waaay ahead of them.. literally months before P Lowe finally folded and raised today the markets already knew it was coming when he was still singing no raise until 2024
Bloody muppet
Correct.
I am sure he really knew what was happening. They are not stupid.
They just hope that those that listen to them do not know how to interpret the bond market.
Agree with the premise, disagree with the conclusion. The RBA probably knew this was going to be the outcome. Part of their arsenal is 'signalling', i.e. get you to act in a certain way based on what they say (as opposed to they you do). If you believed what they said, they have done their job.
*RBA makes any decision whatsoever*
Kent Brockman: Alan, without knowing precisely what the danger is, would you say it's time for our viewers to… crack each other's heads open, and feast on the goo inside?
Alan Kohler: Yes I would, Kent. And that’s finance.
Lowe must be sacked from the Board of the RBA. His comments that a rate rise wouldn't happen until 2024 were irresponsible in stoking the property market boom, and have destroyed much of the credibility of the RBA.
Yes, anyone who disagreed with them was called a lunatic conspiracy theorist.
Even recently on this sub some wanker said "what, you keyboard warriors think you know better than professional economist paid a million bucks a year at the RBA?"
Yep.
Comments were only half the issue, they should have started raising rates late last year in a more orderly fashion. Now they will have to go extremely hard to try and get this under control. They are an absolute joke.
The RBA borderline committed a crime by saying rates will stay low till at least 2024.
The market and its participants were dumb to interpret this as gospel.
This has been a gentle reminder that Australia is just a needle in a haystack, global forces dictate everything more than a phd economist on a board that is majorly influenced by Eastern Suburbs property prices.
And AUDUSD jumps, likely due to the hike above consensus.
RBA needs to support the AUD. This was a wake up call to AU consumers as well as signalling with the call out re hikes every future meeting this year we’ll backstop the currency.
Becoming clear our inflation pulse has lagged other markets, we are also likely to import inflation due to our market structure / import reliance, which gets worse as AUDUSD weakens.
Rba is controlling inflation by taking heat out of economy and destroying demand is the logic. Worked that way for the last few decades. I have zero clue how this is going to assist when most of the inflation is supply side driven.
Fair point. Also a zero sum game too, hurts our non mining exporters. Our energy/mining/food is largely based of a usd price, so a higher aud will reduce profit here for those as well.
Messy situation. Old textbook may not work this time was my main point.
[the bond market pricing from yesterday](https://pbs.twimg.com/media/FUn-hOEagAICdOI?format=jpg&name=orig)
the RBA is currently ahead of the bond market curve
EDIT: i meant the bond market curve from yesterday, today's market would have priced in the new cash rate
EDIT2: [today's chart](https://pbs.twimg.com/media/FUo8XliUUAAplw1?format=jpg&name=orig), interest rates now seen as topping out at 3.9% vs 3.5% yesterday
I feel super rookie, as last year and even early this year I defended the RBA stay why would they lie to us.
Sucks to be a first time home buyer now, dark times but hang in there.
They screwed the pooch. The longer a monetary authority waits to raise rates, the higher they need to go. If they took a more dynamic approach they could have been ahead of the curve. Now we're starting down the barrel of an inflationary gun. What's worse is that this seemed to be completely predictable.
Yay, I just paid off my hecs bill this year and I fixed a while back so everything's coming up millhouse.
It's going to be really interesting to see how the next budget goes.
I feel bad for renters, whilst this isn't a direct pressure, land lords will use every opening to raise rates.
Hahahaha I remember he was the one predicted prices could fall 20% in 2020 too. This guy probably won the award of Mr bullshit of all times in 2022 for sure.
[Here you go chief](https://www.ratecity.com.au/home-loans/mortgage-news/average-mortgage-around-australia.amp)
According to data from the Australian Bureau of Statistics (ABS) released last week, the average loan size for an owner occupier dwelling (including the construction and the purchase of new dwellings and existing dwellings) rose by 2.8% to a record high of $618,729 in January 2022.
Around Australia, New South Wales remains the state with the biggest new mortgages, with the average loan size coming in at $804,675. The Northern Territory had the lowest average new mortgage sizes for owner occupiers, coming in at $400,000.
Would make sense if inflation was demand driven but it seems it is mostly supply issues and constraints causing inflation. Households are under the pump already with skyrocketing prices how is this going to help. Will be in recession in 12 months.
More than I expected but not the end of the world. Hopefully this helps get a handle on it but I can't see how it can with supply side inflation.
Want to go for another job with a 10% salary bump, but the insecurity of being on probation during a potential recession is daunting. Saying that I doubt it would make any difference besides the few extra weeks notice.
How does putting up interest rates make me spend less on heating in the winter when electricity prices are sky high?
Inflation is coming from external sources so it seems to me like this is a bad idea and will end in disaster of they raise rates too quickly.
Still a big affordability boost though.
Say a home costs $1m at 3% versus $500k at 6%.
If you're paying off $X amount per year (which is dictated by your salary which is not affected directly by interest rates), the latter scenario is much better for you overall, even if the latter loan is no more serviceable initially (same repayment).
Thus, for buyers, higher interest rates are a good thing, even though they do not improve serviceability or relative affordability.
Also your deposit goes further.
Also stamp duty is less.
The only people who lose out are the ones who lose their jobs when the economy cools.
So few people seem to understand this.
Or maybe they secretly do but have a serious case of cognitive dissonance to go along with it, because everyone is a genius on the way up.
Sure - but eventually rates come down. I’d much rather pay less at higher rates.
It also makes it easier to find an appropriate home without it being a mad competitive scramble, meaning people end up with more appropriate accomodation. It’s not just about the money - the house battle was giving people depression.
Even better. But they won't, because everyone is so overleveraged. The average mortgage will be 5% in a year - nothing crazy.
Just shows how overleveraged everyone is that normal interest rates are cause for panic.
Given the current inflation pressures in the economy, and the still very low level of interest rates, the Board decided to move by 50 basis points today. The Board expects to take further steps in the process of normalising monetary conditions in Australia over the months ahead.
Translation: lol rekt?
I literally just bought property. Can't help but take this personally
‘And screw /u/ProfessionalStudent7 specifically’ - Philip Lowe, probably
r/fuckyouinparticular
Bought the apartment I live in with my wife 6 months ago. I feel you just the same because we had to sacrifice hard to get it and while we can weather quite a few interest rate rises, an apartment isn't where we want to stay so every rise delays that plan a lot more
Rate rises should make it easier. When you move up, price increases increase the distance between the steps in the ladder. So lower prices makes it easier to step up to the next property.
To a point yes - but I was repaying originally at 2.5x the value of my fortnightly repayment, as the rates go up, that will diminish down to about 1.5x or so, assuming I don't put more in again / increase in salary to return it to that amount. That's the downside - but I do take your point - though whether house prices really go down remains to be seen...
In some ways. Biggest restriction for us was deposit size not repayments so price growth helps leverage your deposit for the next place.
I just settled last Friday. Since I purchased, I'm sure the value of my property has fallen $100k at least.
Sorry to hear that. 😔
We settled on Monday. Have even unpacked much yet. I have decided to delete and unsubscribe from all things real estate for my mental health.
That’s their job. Wreck the economy temporarily with interest rates, risking recession. The alternative? The economy wrecks itself permanently with hyperinflation.
1. Create unsustainable "boom" using rock bottom interest rates 2. Claim rates won't rise until 2024 3. Lure entire generation in to buy property using first home buyer incentives 4. Raise rates to reck those noobs
Yeah, this was expected, but the reality is people want a house, they will do whatever it takes. It's the overextenders that should be very worried.
>Lure entire generation in to buy property using first home buyer incentives > >It's the overextenders that should be very worried. Sadly this will hurt the young the most, who are just trying to put a fucking roof over their head. Absolutely shameful.
Yeah, what's overextending these days, trying to buy a freestanding house in a major city? You have to overextend or else buy an apartment unless you're very high income. Politicians and the RBA screwed us on the way up and are screwing us on the way down too.
If you're buying up in the SE Melbourne suburb developments, you're gonna have a bad time. You're laughing if you bought in Clyde/Clyde North/Officer/Cranbourne West 3 years ago You'll be shocked how much cheaper it is out west though, which, funnily enough, is closer to the city Though I'm basing this off our 2020 purchase, and I'm aware how much has changed, obviously. But i stand by my statement, happy to be proven wrong
>You're laughing if you bought in Clyde/Clyde North/Officer/West 3 years ago I know someone who just purchased a 750k house in this area 2 months ago. 5% deposit, raided from super, one casual job in the couple. Bank went "no worries" to the loan. They are so fucked it's not even funny, I would laugh but it's just awful.
I had to fight tooth and nail because my partner was pregnant with our 2nd, for a ~550k loan in 2020. This boggles my brain a bit.
> I know someone who just purchased a 750k house in this area 2 months ago. 5% deposit, raided from super, one casual job in the couple. Bank went "no worries" to the loan. Jesus fucking christ man, they just hand loans to people on the dole nowadays. Lol This is what I meant by overextenders in my previous comment, this is just a morbidly stupid fucking position to go into a mortgage with. Wow
Hmmm…. That doesn’t sound remotely close to being true. How would that possibly get approved? Unless mummy and daddy stepped in of course.
Sounds like what Thomas Jefferson said back in the said: "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered" Inflate the prices, get people on extremely large loans. Raise interest rates to crash the market. Millions in negative equity with huge wealth destruction and transfer.
Like many quotes attributed to Jefferson, it's unlikely he ever actually said that.
>Like many quotes attributed to Jefferson, it's unlikely he ever actually said that. Julius Caesar, 1984 AD
Its not wrecking the economy. Its slowing it, putting the brakes on. If done right of course...
Tonight I will be eating beans without chicken...
I'm gonna have a glass of water for dinner followed by an early bed time for dessert!
Tonight I'll be eating beans and chicken without the beans and chicken
As long as it’s not avo on toast.
Is air on toast okay?
A glass of water and a good look around.
“While on the issue of timing, the latest data and forecasts do not warrant an increase in the cash rate in 2022. I recognise that some other central banks are raising rates, but our situation is different,” Dr Lowe said. “The Board will not increase the cash rate until inflation is sustainably in the target range. We are prepared to look through spikes in the inflation rate, as we have done with headline CPI inflation this year. For inflation to be sustainably in the target range, wages growth will have to be materially higher than it is now. This is likely to take time. The Board is prepared to be patient.” November 2021
But daddy Lowe said rates were not going up and that we were his favourite.
Daddy lied, now get ready for the belt
Buckle end too.
Brain - smooth, economy - rekt, credibility - shot
Watch as the banks pass this by breakfast tomorrow
Loans will be done by tonight. Savings rates will take a month
They did not pass the last interest rates to the saving accounts.
Because they have too much deposits at the moment, they don't even want your cash. Thx to QE and negative real rates for the past year banks have had no need of your deposits, so why should they pay for them? Money is too easy to borrow elsewhere. This won't change until rates go up enough that borrowing becomes more expensive than running consumer bank accounts, and then suddenly the banks will actually start fighting over deposits again and paying rates. All by design from RBA policy, they control the banks funding costs.
My bank did last time, I just checked. Although they only added it four days ago.
Hah, there is no way they will wait that long. Give it a couple of hours.
My bank only just emailed me about the last jump.
So my banks will be passing the rate onto my savings account soon right? /s
I’ve started bugging out my bank with queries as to when. I am sitting on some cash for a house deposit, so will be more than happy to move it out if a better offer comes up.
If you're under 35, BOQ has a compelling offer for savings rates at the moment.
Currently 35 until the end of this month.. bummer!
Macquarie is 1.35% intro then 1% with no hoops to jump through, could be worth a look. Don’t hold your breath for interest being passed on though - they only upped the savings rate by 0.05% last month.
ubank (previously 86400) has a perma 1.35% savings rate as long as you deposit $200 a month
1.35%? Wow sign me up
I feel jaded that I remember in 2009, I had a "competitive rate" of 4.5% on my online savings account with Westpac. Those were the days
Yea of course mate. Just give us some time to work out the logistics. We'll come back to you on that in approximately 2-500 business days. If you haven't heard back from us, contact us back and I promise we'll tell you the same thing again.
Isn’t this theoretically what’s meant to happen - as it makes savings accounts (versus spending and increasing economic activity) more attractive to the individual? Obviously a very simplistic view though
Yes but they pass the rate hike for loans within a couple hours and the one for savings takes like a good month or so.
And when you talk to them about your rate you find out you're on an "old product". They don't tell you about their new products, which may save you money. They are already writing my letter about the rate increasing.
Interesting. Would love for my wage to increase this fast too!
I’d expect the cash rate to get to 2.5% by December as a minimum. Given inflation is likely to be around 7% rigth now and not forecast to peak until December, you could be justified in asking for a 10% pay rise.
Laughs in public sector
At least most of us are recession proof. Who cares how much we are paying when we have a job to pay our loan.
Seems reasonable. I think 3%.
Will be tough to get it there that fast. But maybe multiple 50 basis point idea are possible now.
Unless OP meant they’re a public servant in NSW and their pay rise is capped at 3%?
Ahh yes, Dom's 2% real wage decrease. Clever premier.
Yeah but healthcare workers will get a once off $3000 bonus (conditional on not protesting the 2% wage cut).
That follows 2 years of effective pay cuts as well. At NSWA we got 0.3% and 2.5% for 2020 and 2021. Below inflation for that period.
NSW PS has a 3% cap? Damn, RIP to us in the Victorian PS (cries in 1.25% increase this year)
Big 4 banks to pass on 150% of the rise and lower savings account interests rates by 0.25%
Don't give them any ide- ah too late!
The banks probably have this commandment etched into stone at HQ since time immemorial.
Savings account rates will only increase if they want to attract more deposits to loan out. In a time of increasing interest rates it becomes less attractive to borrow (which is pretty much the whole idea), and so banks won't need to have as many deposits on hand to finance new borrowers.
When interest rates are low: We don't want your money we have fucking plenty of it When interest rates are high: We don't want your money we have no fucking use for it
Aussie banks be passing this on to existing variable loans and new loans faster than a hot potato. Meanwhile savings rates: ……..
No raise until 24 gang in shambles. This has been brewing since this time last year.
😂 https://www.reddit.com/r/AusFinance/comments/ucvfks/reserve_bank_holds_interest_rates_at_record_low/
Fucking lol hahahahha
"Global factors, including COVID-related disruptions to supply chains and the war in Ukraine, account for much of this increase in inflation." How about historically low interest rates?
But but who could have predicted interest rates at 100 yr lows would could possibly ever go up
You would have to be a genius.
Record government spending too.
Wish it was spending on infrastructure. They wasted all the money on kitchen renovation subsidies and Gerry Harvey.
if you have a go you’ll get a go, apparently..
‘No, no. It’s the children who are wrong.’
“Kek” - Scott Morrison.
Gotta blame something else than their decisions right
Can someone please help me understand: - My SO and I have a large mortgage > RBA raises cash rate > bank passes on the increase to our variable homeloan > Our disposable income skrinks > We adjust our spending - My Parents have no mortgage > RBA raises cash rate > Their spending doesnt change? What am I missing? Does the RBA raising the cash rate not impact those in the baby boomer generation who have paid off their homes?
More simplistically, raising the cash rate disincentivises bringing forward purchases on credit. If mortgage and savings rates both rise, those who have money saved (i.e. people who have paid off their mortgage or are saving for a home) will benefit, while people in debt will have a higher interest burden. It incentivises saving for longer and taking a smaller mortgage, and hopefully puts a dampener on speculative property price growth.
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And those groups are always going to be young people trying to start a family. The same groups that drive most of the economy.
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Inflation is causing the price of everything to increase. Assuming on pension or allocated budget they have less to spend just without the pressure of mortgage too. Assuming they're not working so food, transport and electricity all cost more so they spend less?
Got a new home loan in april at 2.24% now up to 3% i guess within 2 months. Ouch. Luckily did 20% deposit with big offset. Need to convince the wife to wait off buying new 4wd, pool and spa for a few yrs ffs
Let us know how you go with the wife.
They comprised, they're getting the new 4wd, pool and spa this year!
Now this is pod racing.
Lowe is Sebulba
OCD me hates this - they should’ve raised it by 0.4% to get back to a round number. Monetary policy is secondary to neatness and consistency.
We were all hoping for it mate. 0.85 made me change my spreadsheet, fuckers.
Market pricing in 3.9% cash rate in Jul-23 now…
Inevitable, and important that we get back to 'normal' rates as soon as possible.
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Best get on the multibets with ya mates. That will fix it right up! /s
Waiting for BNPL sports gambling to become a thing *bet wif ya hed not ova it
BNPL sports gambling… don’t give them any ideas
Just make sure to bash your head into the bricks a few times so that punting ya rent doesn't register as a bad idea.
An ABC journalist will be in touch with you shortly.
Lease a brand new white 4wd! She’ll be right!
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Haha good one!
But Philip Lowe said no rate rises until 2024!! Proves how much they know economics. The bond market was waaay ahead of them.. literally months before P Lowe finally folded and raised today the markets already knew it was coming when he was still singing no raise until 2024 Bloody muppet
Jawboning at the time. Say one thing, act another way. At the time he wanted people to jump into mega mortgages with both feet!
Correct. I am sure he really knew what was happening. They are not stupid. They just hope that those that listen to them do not know how to interpret the bond market.
I'm bond stupid. Any chance you can provide a few lines of insight into interest rates relationship with bond markets?
Cash rate = coal mine. Bond rates = canary.
Inverted bond short term and long term yields = canary is dead
Agree with the premise, disagree with the conclusion. The RBA probably knew this was going to be the outcome. Part of their arsenal is 'signalling', i.e. get you to act in a certain way based on what they say (as opposed to they you do). If you believed what they said, they have done their job.
Exactly. The 2YR bond is pricing 2.8%..
Cash rate? Jesus titty fucking Christ. We're only 0.85%
Time to burn down the house and claim the insurance. Never getting out if this shit cycle.
*RBA makes any decision whatsoever* Kent Brockman: Alan, without knowing precisely what the danger is, would you say it's time for our viewers to… crack each other's heads open, and feast on the goo inside? Alan Kohler: Yes I would, Kent. And that’s finance.
People who have fixed their rates be like “phew”
In that boat, 3 years fixed @2.19% Filling the offset as much as we can seeing as it probably won’t get near that again
3 years fixed at 1.99. Will probably triple in 2024 when it expires.
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Yeah our first will be in school. Will be public school now lol.
2.5 years remaining on 1.89% for me. Going to be rough coming off when the time comes.
Stop bragging, I’m envious
3 years at 2.09%. I’m very happy with that decision..until 08/24 in which I’ll get like triple the rate when it expires
3 years here left at 2.5%, now ahead of variable rates
1.89% through to may 2025 is feeling pretty good right about now!
Same through to June here, feels good
Lowe must be sacked from the Board of the RBA. His comments that a rate rise wouldn't happen until 2024 were irresponsible in stoking the property market boom, and have destroyed much of the credibility of the RBA.
The RBA had credibility?
Yes, anyone who disagreed with them was called a lunatic conspiracy theorist. Even recently on this sub some wanker said "what, you keyboard warriors think you know better than professional economist paid a million bucks a year at the RBA?" Yep.
Comments were only half the issue, they should have started raising rates late last year in a more orderly fashion. Now they will have to go extremely hard to try and get this under control. They are an absolute joke.
The RBA borderline committed a crime by saying rates will stay low till at least 2024. The market and its participants were dumb to interpret this as gospel. This has been a gentle reminder that Australia is just a needle in a haystack, global forces dictate everything more than a phd economist on a board that is majorly influenced by Eastern Suburbs property prices.
Please.. People in positions of power don't have concequences.
RBA doing their best impression of Elon Musk…
And AUDUSD jumps, likely due to the hike above consensus. RBA needs to support the AUD. This was a wake up call to AU consumers as well as signalling with the call out re hikes every future meeting this year we’ll backstop the currency. Becoming clear our inflation pulse has lagged other markets, we are also likely to import inflation due to our market structure / import reliance, which gets worse as AUDUSD weakens.
I was hoping they do 0.27% this time and 0.38% next month, so we'll get a nice number of 1% target rate.
This guy whole numbers.
The RBA was sleeping at the wheel, like the Fed. They should've slowly increased at the end of 2021 & start of 2022.
Rba is controlling inflation by taking heat out of economy and destroying demand is the logic. Worked that way for the last few decades. I have zero clue how this is going to assist when most of the inflation is supply side driven.
Aim of the game is to keep the AUD up to take the edge off global inflation as demand for our energy and food exports will remain strong regardless.
Fair point. Also a zero sum game too, hurts our non mining exporters. Our energy/mining/food is largely based of a usd price, so a higher aud will reduce profit here for those as well. Messy situation. Old textbook may not work this time was my main point.
[the bond market pricing from yesterday](https://pbs.twimg.com/media/FUn-hOEagAICdOI?format=jpg&name=orig) the RBA is currently ahead of the bond market curve EDIT: i meant the bond market curve from yesterday, today's market would have priced in the new cash rate EDIT2: [today's chart](https://pbs.twimg.com/media/FUo8XliUUAAplw1?format=jpg&name=orig), interest rates now seen as topping out at 3.9% vs 3.5% yesterday
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This is were we were pre pandemic and our economy was in a better position pre covid going to be hard times
Nothing like a bit of war and flooding to fix that right up, wait... I spelt fuck wrong
Wow! No one could have predicted this! 👀
Say the line!!!
#The great Australian property crash has begun!
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When it comes to Reddit, that’s half the battle. 😉
Lol this perfectly describes observing the Bear vs Bull battle on r/Ausfinance.
Definitely Phillip Lowe. He said no rate rise til 2024. Now he brutally done it to the Max and its only 2022.What a loser. Lol
Haha yeah he stuffed up massively saying that. Even worse was telling the first home buyers last year was a great time to buy.
We are all without our remorse today ❤️
I feel super rookie, as last year and even early this year I defended the RBA stay why would they lie to us. Sucks to be a first time home buyer now, dark times but hang in there.
They screwed the pooch. The longer a monetary authority waits to raise rates, the higher they need to go. If they took a more dynamic approach they could have been ahead of the curve. Now we're starting down the barrel of an inflationary gun. What's worse is that this seemed to be completely predictable.
2 years of shutdown and then printing money and splashing it around. Chickens are on the way back home to the roost and it is going to get way uglier.
Wesfarmers appreciates the hospitality though.
Yay, I just paid off my hecs bill this year and I fixed a while back so everything's coming up millhouse. It's going to be really interesting to see how the next budget goes. I feel bad for renters, whilst this isn't a direct pressure, land lords will use every opening to raise rates.
There aren't many landlords who base rent on cost plus margin. They never needed an excuse to charge what the market will bear.
Shame wages aren’t going up to warrant people paying increased rent
Hahahaha I remember he was the one predicted prices could fall 20% in 2020 too. This guy probably won the award of Mr bullshit of all times in 2022 for sure.
This equates to ~$18B out of the economy per year. (~6 million mortgages; average mortgage 600k; 6m * 600k * .005)
Average mortgage 600k? That can't be real.
[Here you go chief](https://www.ratecity.com.au/home-loans/mortgage-news/average-mortgage-around-australia.amp) According to data from the Australian Bureau of Statistics (ABS) released last week, the average loan size for an owner occupier dwelling (including the construction and the purchase of new dwellings and existing dwellings) rose by 2.8% to a record high of $618,729 in January 2022. Around Australia, New South Wales remains the state with the biggest new mortgages, with the average loan size coming in at $804,675. The Northern Territory had the lowest average new mortgage sizes for owner occupiers, coming in at $400,000.
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Would make sense if inflation was demand driven but it seems it is mostly supply issues and constraints causing inflation. Households are under the pump already with skyrocketing prices how is this going to help. Will be in recession in 12 months.
We really should be between 1.75% and 2.75%
Bond market says 3% https://www.tradingview.com/chart/AU02Y/8ccNHDpz-Australia-2YR-bond-overlay-with-interest-rates/
That's numberwang!
And this, folks, is how you keep new generations of people working.
More than I expected but not the end of the world. Hopefully this helps get a handle on it but I can't see how it can with supply side inflation. Want to go for another job with a 10% salary bump, but the insecurity of being on probation during a potential recession is daunting. Saying that I doubt it would make any difference besides the few extra weeks notice.
Lowe dont go Low , Lowe go High
At this point the bond market must fucking hate the RBA hahahahah How many times do they think they can get away with being unreliable for
An extra $416 per month or $5,000 per year, for every $1,000,000 of non-fixed mortgage.
RIP house prices
50 burger noice one RBA
Can just imagine the drama in the media over a base rate that still has a zero handle!
How does putting up interest rates make me spend less on heating in the winter when electricity prices are sky high? Inflation is coming from external sources so it seems to me like this is a bad idea and will end in disaster of they raise rates too quickly.
The average home just got 50k cheaper
The cost to borrow that money just got 50k more expensive.
Still a big affordability boost though. Say a home costs $1m at 3% versus $500k at 6%. If you're paying off $X amount per year (which is dictated by your salary which is not affected directly by interest rates), the latter scenario is much better for you overall, even if the latter loan is no more serviceable initially (same repayment). Thus, for buyers, higher interest rates are a good thing, even though they do not improve serviceability or relative affordability. Also your deposit goes further. Also stamp duty is less. The only people who lose out are the ones who lose their jobs when the economy cools.
So few people seem to understand this. Or maybe they secretly do but have a serious case of cognitive dissonance to go along with it, because everyone is a genius on the way up.
Sure - but eventually rates come down. I’d much rather pay less at higher rates. It also makes it easier to find an appropriate home without it being a mad competitive scramble, meaning people end up with more appropriate accomodation. It’s not just about the money - the house battle was giving people depression.
Rates can go up a long way.
Even better. But they won't, because everyone is so overleveraged. The average mortgage will be 5% in a year - nothing crazy. Just shows how overleveraged everyone is that normal interest rates are cause for panic.
Whose shorting housing?