Rate cut won't reignite property market: John Symond

Another quarter or half percent interest rate cut won't make the property market hotter, John Symond thinks.

The founder of Aussie Home Loans noted parts of the real estate market had cooled.

"Certainly the lower rates go the more affordable it is for borrowers, but I think we have rates at the moment where another quarter or half percent rate cut I don't think will push the property market to be hotter."

He envisaged rates would be cut because of the non-housing sector which needs "every bit of help they can get."

But with falling oil prices a boost to mum and dad wallets, Symond reckons the Reserve Bank might wait on the first cut in 2015.

"They might wait a little bit longer to drop than next week," he told Ross Greenwood on 2GB Money News.

"The political situation is not helping the economy," he said.

Late last year John Symond tipped five-year fixed loans were heading to 4.75%.

His comments came before today's CPI data which was was mixed, with a further slowing in headline inflation but some pick up in underlying measures.

Headline inflation printed at 0.2% q/q and 1.7% y/y, the weakest annual rate since Q2 2012.

At the component level, ANZ said the largest downside surprises were for fruit and vegetables, as well as retailing components such as clothing & footwear and household furnishings and audio, visual and computing equipment.

"Indeed, tradables measures were very weak, confirming our view that global disinflationary trends and weak demand conditions are partially offsetting the impact of pass-through from the weaker currency."

Meanwhile ANZ Banking Group chief executive Mike Smith has suggested the Reserve Bank of Australia should resist calls to cut official interest rates saying he was optimistic about Australia’s outlook – particularly with a falling dollar making exporters more competitive.

“If I was the central bank I would wait and see how this plays out because if the currency can take most of the shock, it’s a much better way to deal with it,” he said in remarks ­published by the bank on its Bluenotes website.

Speaking exclusively to BlueNotes on video, Smith said while plunging commodity prices were having an effect, the declining Australian dollar was mitigating some of the damage. “And of course it does leave you the option of monetary policy later.”

“I still see Australia as relatively well placed. I’m still not too worried by the Australian economy.”