Rates to go higher by year end
The CBA and ANZ kept their rate rises in line with the RBA's move of 0.25 per cent yesterday, with the official cash rate expected to hit 4.75 per cent by year end.
WA's biggest home lender says it is still to decide what to do about its mortgage rates, despite its owner hiking them in line with the Reserve Bank yesterday.
A spokesman for Bankwest, which has about 30 per cent of the residential mortgage market by value in the state, said the bank was "still reviewing" its rates following the RBA decision to hike the official cash rate by 0.25 of a percentage point to 4 per cent.
Bankwest's owner, the Commonwealth Bank, immediately raised its rates by the same amount.
Since the RBA started raising rates again in October, Bankwest has waited up to a week longer than the Big Four banks before also lifting its rates.
Meanwhile, the hike was met with a mixed reaction by industry lobby groups.
While the Australian National Retailers Association - which represents the likes of Coles, Woolworths and Bunnings - said the rise was expected, following strong retail sales growth in January, lifting rates further and too quickly could create uncertainty for retailers already facing other costs.
"Allowing for transitional arrangements, changes to Sunday penalty rates on permanent employees alone will cost the sector $19 million on July 1," she said.
National Retail Association executive director Gary Black - whose organisation claims more than 3000 members - said the "modest" recovery in sales in January followed a "disastrous" Christmas period.
The rate rise would harm retailers as consumers would reduce spending.
Housing groups predictably opposed the rise, though they acknowledged the need for rates to lift.
"(We) recognise the need to return interest rates to normal levels over the course of economic recovery but caution against haste given the still considerable concerns over the state of the global economy," Housing Industry Association senior economist Ben Phillips said.
Urban Development Institute of Australia WA chief executive Debra Goostrey said the state's property market was in "slow recovery mode" as consumer confidence rose.
"The impact that this rate increase will have on people's mortgage repayments may put a dent in that growing confidence," she said.
The UDIA had urged the RBA to hold off on further rate increases until the effect of previous hikes, and the cut to the First Home Owners Grant boost, could be measured.
Comments
Be the first to comment.
New user? Sign up
Make a comment
You are logged in as [Logout]
All information entered below may be published.
Thank you
Your comment has been submitted for approval.
Comments are moderated and are generally published if they are on-topic and not abusive.