money news

Wednesday: interest rate cuts and property market pain

Interest rates likely to fall again because of Brexit, while parts of the Aussie property market feel further pain.

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Fairfax Media is reporting that the chances of the Reserve Bank deciding to drop interest rates by a quarter of a per cent in the near future are well and truly heightened because of Britain’s decision to leave the European Union last week.

The worry is that if the United Kingdom falls into recession as a result of the Brexit vote that this will lead to even slower global growth which will affect the Australian economy. Currently the official cash rate is 1.75 per cent, representing a historic low.

Onto property and news.com.au is reporting that the latest ‘Pain and Gain’ report from CoreLogic shows 9.2 per cent of homes resold in the first quarter of this year suffered a loss on their purchase price, up from 8.3 per cent at the end of 2015 and higher than the 8.8 per cent in the same period 12 months ago.

The Australian Financial Review is reporting that while the housing boom has been great for some home sellers, those in Melbourne’s inner-city who own apartments in saturated markets, are feeling the pain and are suffering from losses.

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