While the number of home loans approved for July rose 0.3%, Cigna Wealth managing director Kent Leicester says it was well under the market expectation for a 0.7% increase.
This is in contrast to comments
made by Mortgage Choice chief executive officer John Flavell, who said the increase in home loan demand was interesting given the current market conditions, which has seen Australian lenders make sweeping changes to their investment policy and pricing.
However, Leicester also says the RBA should be concerned by the latest Westpac-Melbourne Institute index, which showed consumer sentiment dropped 5.6% in September.
“Continuing stock market volatility, weak domestic economic data and concerns about China’s slowdown and the refugee crisis in Europe are all weighing heavily on consumer sentiment.”
A recent online survey by Cigna Wealth found that 60% of respondents expected the RBA to lower rates again this year, after it made cuts of 25 basis points in both February and May.
“The RBA still has more room to move than most other central banks around the world so we could see another rate cut, perhaps as soon as next month or on Melbourne Cup day in November.
“The central bank has form on the board for taking some action on cup day.”
Underwhelming housing finance data and a major drop in consumer confidence point to the need for the Reserve Bank of Australia to further lower official interest rates, according to leading financial advisory and investment group Cigna Wealth.