Consumers are seeking more interest rate action from the Reserve Bank of Australia (RBA) despite the central bank twice lowering its cash rate this year, a national survey has found.
A poll by leading mortgage broker Priority Lending which asked ‘What factor would best help housing affordability?’ found 51 per cent of respondents wanted lower interest rates.
Priority Lending Corporate Spokesman Paul Smith said 26 per cent of the 542 online survey respondents thought a change of federal government would make housing more affordable.
Mr Smith said 16 per cent of those surveyed thought construction incentives was the answer while seven per cent said a decrease in migration.
He said the survey results showed the 75 basis points reduction in the cash rate over May and June had underwhelmed potential home loan customers and existing mortgage holders, who want more interest rate relief from the RBA.
“There is strong support for further rate reductions as some consumers did not believe the previous cuts have made much difference to them,” he said.
“The cuts haven’t been passed on in full by most lenders and they haven’t been a circuit breaker for sectors such as housing and retail.
“The latest monthly credit data from the RBA shows that demand for owner-occupier home loans grew by just 0.2 per cent in June, 2012.
“Consumer sentiment remains subdued as issues such as the European debt crisis continue to cause concern.”
Mr Smith said the RBA would be under pressure to lower the official rate from the present level of 3.5 per cent at its next monthly board meeting on Tuesday, August 7.
“The RBA does have plenty of room to move with its cash rate and most economic commentators have predicted another reduction before the end of the year,” he said.
Priority Lending survey results:
What factor would best help housing affordability?
Lower interest rates – 51%
A new government – 26%
Construction incentives – 16%
Decrease in migration – 7%
Source: Priority Lending
