Still room for rate cuts - but not in May: John Symond

Still room for rate cuts - but not in May: John Symond
Jonathan ChancellorDecember 7, 2020

A May RBA rate cut is becoming less the preferred forecast.

"There is still room for a quarter possibly a half percent, but I don't think they will move next week," the founder of Aussie Home Loans, John Symond, says.

He told Ross Greenwood's 2GB Money News last night, after his recent overseas trip, that there was "no great confidence anywhere".

Greenwood suggests the Australian dollar heading back to 80 cents was a sign of the slight shift in the rate cut probability. 

In February after the last rate cut, Symond forecast another two rate cuts, in part because of the political shenanigans and ensuing lack of confidence.

"I think the Reserve Bank realised what is going on in Canberra is going to cause further problems with confidence and I think it was probably one of the reasons to get them to drop interest rates," he said.

"When you you talk to businessmen, taxi drivers and shop keepers, everyone is so sick of it."

He says the low rates, for those people who have jobs and can afford it, would assist to spur things along, "but not in a crazy sense".

"Why wouldn't you go and buy a property and rent it out rather than put your money in the bank and get 2.5% less tax," Symond said.

The turbulence on the political sphere for the next several months will hurt confidence even more, he bemoaned.

"That's why I'm now thinking the Reserve Bank will continue to drop rates," he said.

"I think there's probably a couple more there."

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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