Interest Rate Cuts

Posted by Unknown on Sunday, April 19, 2009

The recent RBA announcement of a further.25% drop in interest rate cuts made it the lowest cash rate in 30years.

Consumers waited with baited breath to see if the banks passed it on.The Commonwealth was the first to reduce its rates quickly followed by ANZ and the Westpac, the NAB has held off.

No bank has passed on the full cut to their customers and it seems that they tend to take turns in who is going to lead the charge, by how much and who is going to hold.

However we do have to admit that the Australian banking system is far more secure that the US banking system and many larger banks are still making reasonable profits.Shop around for those banks that are passing the cuts to their clients and send a strong message to those that are not.

What does a further interest rate cut mean to the investor – well now is the time to invest in property. Vacancy rates are still between 1-2% ; which is at critical levels, many investment properties are becoming positively geared and although rent values have stabilised overall there is still great return on investment.

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