Tuesday, August 4, 2009
And half the country breathes a sigh of relief...
... as the RBA leaves interest rates at 3%.
This is a breather for all homeowners, but especially for First Homeowners who have come into the market on the back of the First Homeowners Grant, many of whom, it seems, have overstretched their budgets in the rush to get on the bandwagon.
But honestly, in an economic climate where thousands are losing their jobs, it would be foolhardy at best for the RBA to raise rates as the unemployment rate is rising. It would tip the banks back over the edge, in some cases, and screw the economy even further.
Why? Because more families would be forced into foreclosure, in spite of recent changes to bank foreclosure practices.
Let's hope they keep things this way for at least another six months - or until the labour market, which pays for these mortgages, recovers enough to sustain it.