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November 12 2012, 12:13AM

St George chief economist Hans Kunnen said the relative strength of the housing data meant the RBA was less likely to cut the cash rate in December.

"If they didn't cut in November and they get a result like this now you would have to think, well why would you (cut the cash rate) when things are on the pick up?"

"This result in itself would lean towards the RBA saying: we'll leave rates where they are because the past cuts seem to be working."

Despite a drop in construction of new dwellings, Mr Kunnen said the housing data suggested the troubled housing sector was starting to pick up.

"When you see investors involved and when you see lending for new homes picking up, you start to get the inkling that people are starting to overcome their conservatism and are thankful for the cut in rate that the Reserve Bank has done.