Aussie Home Loans Expects Rate Cut
Contrary to recent comments by most market economists Aussie Home Loans expects mortgage interest rates to fall later this year.
Aussie’s comments come despite the continuing buoyancy of the Australian economy, a large Federal Budget surplus, strong housing loan approvals and the AUD continuing to rise.
According to the managing director of Aussie Home Loans, Mr John Symond, “While the economy is in great shape, my view is that there will be a shakeout in world sharemarkets and continuing problems with many of the world’s larger economies.” He added, “It is in this context that rates will come down, even though Australia will remain an island of good economic management and growth.”
“Australia is now in a low inflation and low interest cycle and borrowers can expect to enjoy low, stable rates over the next few years,” said Mr Symond.
Whilst we do not agree with John’s prediction of a rate cut this year and actually think that there is a tightening bias likely next year, his previous predictions on rate cuts have been pretty good. Bearing this in mind borrowers will be hoping John’s form on rate predictions continues.