Rate cuts not working well enough: Aussie John Symond

John Symond, founder of Aussie Home Loans, said rate cuts by the Reserve Bank of Australia are not working as well as they have in previous years.

He says despite interest rate cuts being a boon for buyers, they are indicative of poor conditions.

“It’s all been negative... We’re going to be in a hole. We’re going to be in debt for many years to come,” Symond told 2GB’s Ross Greenwood last week.

The Reserve Bank of Australia has said the rate cuts are giving a much needed boost to the housing sector but Symond says the recovery isn’t strong enough.

“We’ve seen a slight uptick for the past four to five months but there’s certainly nowhere near the speed of recovery that we’ve seen following interest rates cuts before,” Symond said on Money News.

“It’s still very negative. They’re still very cautious and rightly so. There’s not working yet but the market is better than what it was 12 months ago.

“People are cautious and whether it’s buying homes or people go out shopping, confidence drives people’s spending. And right now, it’s marginally better than what it has been but still nowhere near the level that the economy needs.”

And he said valuers are making it difficult for home-buyers, especially first-home-buyers to buy a property.

A disparity between bank assessments and buyer assessment means buyers are unable to secure loans for properties they want to build or buy.

“Valuers are still very cautious and that really does create a gap because if someone has a 10% deposit and the valuer knocks it down by $50,000 that might only be 5% but all of a sudden...they’re out of the game,”

“Even with existing properties it is still the biggest single problem that they all put their hand up is valuations, even on existing properties.