Australia’s richest man warns RBA against interest rate rise
- Monday, October 5, 2009, 17:25
- Asia
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Australia’s richest man warns RBA against interest rate rise
SYDNEY, Oct. 5 (Xinhua) — The Reserve Bank of Australia (RBA) should not raise interest rates as it would undermine the rebounding property market, kill off new developments and drive up rents, according to one of the nation’s richest men, property developer Harry Triguboff.
The founder and chairman of the Meriton Group said on Monday talk of a potential rate rise, coupled with the reduction of the first-home owner grant, had made even the more bullish foreign buyers wary of investing in Australian property.
“There are no new sites being purchased because residential developers and builders (those that still exist) cannot get finance even at current rates,” Triguboff noted in The Australian newspaper.
“And there are no new approvals being granted, because applications have dwindled and consents are like hen’s teeth. All of this will just put more and more pressure on supply.”
He said the RBA may achieve its desire and stop property prices from rising, “but I can tell you for certain that rents will go through the roof”.
“I do not understand why the Australian public is so accepting of the supposedly infallible decisions of the RBA. We already have the highest interest rates in the developed world.”
Triguboff challenged the claim that a new property bubble is forming, which would force the RBA’s hand on rates.
“Should the rates be raised from 3 percent to 5 percent, as suggested, this will result in borrowers’ mortgage payments being 40 percent higher than what they are paying today for no additional benefit.” he said.
Editor: Fang Yang
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