In Australia the news this week is peppered with mortgage related news that is mostly related to the upcoming federal election:
- International reports have suggested that interest rates and their link to the Australian economy are one of the key factors in decision making of Australian voters for the federal election. They mention that house prices have generally recovered well from the global financial crisis but that rising interest rates are not helping new and especially first home buyers to enter the market; the view from abroad also summarises that Julia Gillard is promising Labor’s economic performance is better than Tony Abbott’s would be, making issues like mortgage rates a key election issue.
- In areas of Australia where mortgage stress is high, there is talk that the policies of the major parties in relation to the economy is actually sending voters to some of the minor parties – a combination of cost of living problems and fears of immigrants taking jobs mean some people in these regions are heading for smaller parties.
- Despite the fact that the banks seemed to be waiting until after the election to begin to seriously think about raising interest rates, and that most banks seemed resigned to the fact that despite rising funding costs they wouldn’t be raising rates unless the Reserve Bank hiked the official cash rate, news out this week suggests that the Commonwealth Bank might buck the trend and increase their mortgage interest rates independently. CBA spokespeople say their variable interest rate is one of the lowest around so they don’t expect to lose market share by increasing it.