Sydney and Melbourne lead home price turnaround. Average home prices in Australian capital cities rose during August, for the first time since August 2017, according to CoreLogic’s home value index. Sydney and Melbourne home prices led the way, both up by about 1.5 per cent, as average national prices edged up 0.8 per cent. Prices trended lower in Adelaide, Perth, Darwin and regional areas. “With housing credit restrictions easing and mortgage rates likely to reduce further, this rebound could potentially turn into a ‘v-shaped’ recovery,” said CoreLogic research director Tim Lawless. RBA leaves rates unchanged for September The Reserve Bank of Australia board has left the official overnight cash rate (OCR) unchanged at 1.00 per cent. The RBA board said “an extended period of low interest rates will be required” to reduce unemployment. The RBA Board said it would “ease monetary policy further if needed to support sustainable growth in the economy.” Retail variable home loan rates are now as low as 2.89 per cent p.a. (comparison rate 2.91 per cent p.a.) from Reduce Home Loan’s Low Rider Variable loan. Fixed rates now start from 2.79 per cent p.a. (comparison rate 3.95 per cent p.a.) from Greater Bank’s 12 month Fixed home loan. Behaviour more important than rates for savers. Banks will not necessarily be a part of our lives within ten years with many people, especially young people, expected to use phone ‘wallets’ to manage their money according to author and fintech expert Brett King. Mr King suggested the big Chinese wallets like Alipay or WeChat Pay may become ubiquitous in Australia because of their pioneering trust in biometrics. “It’s the face versus the 16 digit PAN, which is why by 2030 we’re probably all going to be using Chinese digital wallets,” said Mr King. Savers need to manage their behaviour. Savers don’t need their banks to provide them with the best rate or best account features in the market, they need assistance with managing their behaviour, according to author and fintech expert Brett King. Mr King told the FINSIA Summit in Melbourne that: “It’s not about product features. It’s about helping people save behaviourally.” “Savings behaviour is far more effective, around six times more, than the best interest rates to help people to save money,” King said. Borrowers are still opting for variable rates. InfoChoice CEO Vadim Taube most borrowers are sticking with variable rate home loans, despite some very long and very low fixed rate deals, according to search trends on InfoChoice. However, most borrowers are resisting the allure of fixing their mortgage at today’s current low rates because they believe lenders will slash rates even further. Vadim Taube said Reserve Bank governor Philip Lowe has repeatedly stressed he will take the official cash rate below 1 per cent if the economy fails to pick up. The majority of economists expect the RBA will cut rates by 0.25 percentage points in both November and February 2020, bringing the official cash rate to 0.5 per cent.