PHOTO: Cameron Bagrie. Photo credit: The AM Show
Inequality and housing affordability are only going to get worse as interest rates drop further, an economist has warned.
The Reserve Bank aggressively cut the official cash rate from 1 to 0.25 percent in March in an effort to keep money flowing as the impacts of the coronavirus pandemic started to be felt on the global economy.
It’s stayed there ever since, and some are tipping it will go negative next year.
Heartland Bank on Monday announced a one-year fixed mortgage rate of just 1.99 percent, about half a percent lower than the big five.
“All power to the consumer – it’s great to see a domestic player throwing one across the bow,” economist Cameron Bagrie told The AM Show on Tuesday. He’s one of the economists picking interest rates to go negative soon.
“Mortgage interest rates are headed lower. The Reserve Bank is being pretty firm in their desire to get borrowing costs down. They’re offering the banks cheap funding.”
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