Business

Home buyers feel 'robbed' by RBA

Toowoomba home owner Hannah Fowkes, with her daughter Ava, is disappointed and will have no choice but to keep “ploughing on” after the Reserve Bank decided not to cut official interest rates yesterday.
Toowoomba home owner Hannah Fowkes, with her daughter Ava, is disappointed and will have no choice but to keep “ploughing on” after the Reserve Bank decided not to cut official interest rates yesterday. Kevin Farmer

POTENTIAL home buyers in Toowoomba were left feeling short changed yesterday after the Reserve Bank of Australia decided to leave interest rates at 4.25%.

The shock announcement came after the majority of economists predicted the rates would be cut by a quarter of a per cent.

Hannah Fowkes recently purchased a home in Blue Mountain Heights with her husband Jonathan and their three children and said she was disappointed with the announcement.

"It feels like a bit of a rip-off," she said.

The couple purchased their house at the end of 2011 for $365,000, $330,000 of which was borrowed.

"We do feel the usual financial pressure and now we will just have to keep ploughing along for the next few years," she said

"We were planning on doing some renovations to the house but we might have to wait until we've made a few more repayments and then assess where we are at."

Toowoomba Home Loans principal Paul Taylor was also shocked at the announcement and said the decision to maintain the current interest rate gave him mixed feelings.

"There's no doubt this decision is going to disappoint the borrowing public," he said.

"But if you stand back and look at the situation unemotionally then basically they're (RBA) saying 'guys we're doing OK'."

He said the current Toowoomba property market would have benefited greatly from the confidence given by a rate cut.

"When confidence is up people will be far more likely to get involved in the market and be prepared to sign contracts," he said.

"Unfortunately we're not likely to see until a rate drop is announced."

 

Topics:  economy interest rates property rba reserve bank of australia



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