Many of you will have heard me say this before – but my wife has a phenomenally attractive bottom. In fact, it is almost as attractive as the Opera House or the Great Ocean Road.
But this week, I came across an almost as attractive bottom – and it came via the pretty dour Governor of the Reserve Bank of Australia.
In a speech this week the Governor, Glen Stevens, said, “It is stating the obvious that at present, while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that.”
This is the Reserve Bank’s code for ‘we have no plans to drop rates any further.’
So, if this is the bottom, does it mean that rates will soon be going up from here? The answer is a definitive ‘no.’ The last time that the Reserve dropped rates was in August 2013 – and it has made it pretty clear that they will stay this low for quite a long time to come.
But, for homeowners, this bottom is looking particularly peachy. We have entered an unprecedented period of competition which means that, even if the Reserve does not drop rates, home lenders will do so. For example, this week, one lender dropped one of its fixed rates to 3.99 per cent – its lowest rate in over a hundred years!
From where I am looking, things are looking pretty good for borrowers.
I still think the view of my wife’s bottom is better though.
Graeme Salt is a Sydney-based mortgage broker. For a no-obligations consultation, he can be contacted on 02 9922 5055