Thursday 8th September 2016 - 10:08 am

Home loan rates: what now?

by Alan Thornhill

A major bank still expects two rate cuts next year, even though it accepts that figures published by the the Bureau of Statistics yesterday, already reflect “moderate” real growth.


The National Australia Bank said the June quarter:  “…National Accounts revealed moderate real GDP growth of 0.5 per cent, quarter on quarter and  3.3 per cent, year on year…”


It also admitted that the new annual growth rate  “was slightly below our and market expectations.”


However the bank added:  “This was the fastest pace of growth in year-ended terms since mid-2012, although growth is forecast to ease back below 3 per cent as the year progresses.”


But what does all this mean for domestic interest rates?


The bank said:  “ We do not expect any near-term shift in monetary policy, but retain our view that two cuts will follow in mid-2017.”


It said this could be expected in response to the ongoing weak inflation and risk that the economy slows too sharply in 2018 as the dwelling construction cycle ends and LNG exports flatten off.”


The NAB also said the latest growth figures were “somewhat stronger” than the Reserve Bank had anticipated last month.


It said they continue to suggest reasonable growth across the non-mining economy, “despite some modest loss of momentum.”


And it added:  “Government spending has certainly surprised on the upside.”


The bank said that had risen 2.4 per cent in underlying terms in the quarter and adding 0.5per centage points to real growth.


“This reflects stronger government investment – particularly at the state level – likely reflecting infrastructure spending – as well as government consumption,” it said.

Please visit our sponsor


  • I see many interesting posts here. Your content can go viral easily, you need some initial traffic only.
    How to get initial traffic?? Search for: Masitsu’s tricks

  • Hi Fred,
    I use Microsoft’s WordPress to file my stories and all the usual statements to write them, I’m not a technical person and have to rely on professional advice, beyond that point.

My book

wx 2

Weathercoast by Alan Thornhill

A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.

Available now on the iTunes store.


Alan Thornhill

Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.

Please visit our sponsor
Please visit our sponsor


News Archives