With the NAB revising its June assessment of the RBA’s predicted movement, indicating a reduction in the cash rate, and Bill Evans from Westpac now predicting rates will hit record lows by the end of 2012 (try 2.75%), investors and first home buyers have been given a green light. Add to this changes in lending criteria from banks which now take into consideration casual and secondary incomes when assessing mortgage applications and you have a primed demand equation as we progress toward Spring.
Interesting reading on the direction of interest rates from two of the big four with the RBA due to meet this week. Bill Evans suggests 50 bps drop by September (although uncommitted on when the drops will occur, certainly not this month) while Commsec expect a single cut in May only. With the Federal Government firmly standing by its budget surplus position, some would say a relatively small impact of previous rate cuts on construction, it does place the State Governments in a position to ramp-up assistance to the building industry.