Lower rates make no difference
GENERATION Y consumers considering a property purchase look likely to stay on the sidelines unless there's more interest rate relief from the Reserve Bank of Australia (RBA), a national survey has found.
The Loan Market poll which asked 'How are the interest rate cuts affecting you?' found 50 per cent of Gen Y respondents said the two consecutive monthly reductions by the RBA hadn't made any difference to them.
Another 32% of Gen Y respondents said they had just been boosting their savings and more rate cuts by the RBA were needed.
Loan Market corporate spokesman Paul Smith said the European debt crisis was also weighing heavily on Gen Y consumers.
Mr Smith said in the overall response just 30% of the 813 respondents said the RBA cuts hadn't made any difference.
But he said 48% of the total survey sample also wants the RBA to make official rates lower, with the central bank's next rate decision on Tuesday, July 3.
"While consumers and home owners are always looking for interest rate relief, the latest round of cuts has yet to influence the cautious and subdued mindset of Australians," he said.
"Successive RBA actions which reduced the cash rate to 3.5 per cent will certainly be helpful to offset the rising costs of living; however there are larger shifts needed in the economy to boost stalling sectors such as retail and housing.
"The pressure is on the RBA to further reduce the official rate at its next monthly board meeting and then we will see if this is passed on in full by lenders."
The Loan Market online survey found 15% of respondents said they had been spending more as a result of lower interest rates while seven per cent said they had been paying more off their mortgages.
Fourteen per cent of Gen Y respondents said they had been spending the extra cash and four per cent said it had gone towards increased home loan repayments.