Even the big wigs in the RE game can't comprehend that a drop to...

Even the big wigs in the RE game can't comprehend that a drop to the RBA's cash rate, isn't an automatic drop in Bank interest rates.

Of course the banks may still drop their rates and they know more than Joe Public.

But gee-whiz, what an embarrassing article!

---------------

''Rate cut 'shot in the arm' for flagging market''

http://theage.domain.com.au/real-estate-news/rate-cut-shot-in-the-arm-for-flagging-market-20111206-1oh94.html

THE chief executive of Raine & Horne, Angus Raine, said the second interest rate cut in a row was ''a boost in the property arm for every Australian''.

''This will give consumers confidence to get out into the market for the rest of this year and into 2012,'' he said.

Mr Raine said the two cuts, along with the end-of-year deadline for first home buyers on the stamp duty concessions, amounted to ''a shot in the arm with steroids'' for the property market.
Advertisement: Story continues below


"This will give consumers confidence to get out into the market for the rest of this year and into 2012" ... Angus Raine. Photo: Domino Postiglione

The chief executive of LJ Hooker, Janusz Hooker, agreed. ''Basically you have a double whammy for first home buyers, who should take advantage of the last month of the stamp duty concession,'' he said. ''With those interest rate cuts and future ones next year they are in a very good position to be financially better off.

''We've had housing prices flat for the last 12 months so the outlook is for future rate cuts. And that could be the signal for that 'flat' to change to the beginning of an upward trend [for prices].''

The general manager of Laing+Simmons, Leanne Pilkington, also welcomed the move. ''More important than the 25 basis point reduction is the fact that rates have declined for two consecutive months now, confirming they are trending in a downward direction,'' she said.

''This trend is paramount to buyer confidence and is another factor supporting what is already a buyer's market.''

Home builders said the rate cut should have been bigger. ''New housing activity is staring down the barrel of re-hitting GFC lows,'' said the Housing Industry Association chief economist, Harley Dale. ''A 50 basis point cut would not have been out of line.''