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ISCOVER
Jessica Darnbrough
With dwelling commitments and consumer confidence falling at an unprecedented rate, a July rate cut is not unlikely.
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Data from the Australian Bureau of Statistics last week revealed that dwelling commencements fell sharply in the March 2012 quarter and have been declining since the middle of 2010 to run at an annualised level of 122,492.
If the Reserve Bank of Australia does choose to cut the official cash rate next week, all eyes will be on the majors to see if they pass any or the entire rate cut on to their borrowers.
Last month, ANZ was the only major bank to pass on the rate cut in full.
The lender’s decision to break ranks with the Reserve Bank and review its cash rate on the second Friday of every month meant the other majors only had to wait a couple of days after the rate announcement to see what their major peer did with rates.
While ANZ’s decision to effectively break away from the other lenders and move independently on rates has divided the industry, ANZ head of third party and relationship channels Meg Bonighton said the move has made the bank more “transparent”.
“The market is very uncertain at the moment and our decision to review rates on the second Friday of every month provides borrowers and brokers with clarity and certainty around when we would make rate changes,” Ms Bonighton told The Adviser.
“When we first made the announcement we got mixed reviews, however, I am happy to say that whenever I get the chance to talk to a broker who does not necessarily support our decision, by the time I have finished the conversation, they have usually changed their tune. Once you lay the facts down on the table and discuss why we do it, they can see the sense in it."
