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Banks 'must remain in sync with the RBA'

Australia's trading banks must remain in sync with the Reserve Bank of Australia's cash rate increase, the Housing Industry Association (HIA) has claimed.

Australia's banks must not raise their rates above the new levels set by the Reserve Bank of Australia (RBA), the Housing Industry Association (HIA) has claimed.

The board of the RBA decided yesterday (November 1st) to raise the country's interest rate from 4.5 to 4.75 per cent.

HIA chief economist Dr Harley Dale said that the attention of Australian property owners will now be on Australia's trading banks to see whether they make an "unjustifiable decision to hike rates more than the Reserve Bank did".

He went on to say that the recovery in residential construction will not be sustained, which could mean that there is a greater demand for existing property in Australia.

"In such an environment it is absolutely imperative that Australia's trading banks remain in synch with the RBA's cash rate increase," Dr Dale concluded.

Last month, Australian property expert John McGrath wrote in his blog that the stability of interest rates in September had given homeowners extra confidence to pursue pre-Christmas sales.

Posted by Steve Douglas 

- banks, rates, HIA, interest, RBA

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