Economists say the latest wage growth figures confirm the Reserve Bank made the right call to lower interest rates. Borrowers have welcomed the relief but as the dust settles, they're also wondering when the lenders will actually pass the savings on.
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00:00After the RBA's first rate cut in four years, the question for home borrowers now is, when
00:11will their bank deliver?
00:21Some lenders like Athena have already passed the rate cut on, but three of the big four
00:26banks and Macquarie are holding out until the 28th.
00:30It's 4th of March for Westpac customers, and the 10th for HSBC home borrowers.
00:37We could see the lowest variable rate drop to around 5.5%.
00:45While delaying rate cuts is good for bank profits, it's bad for this mortgage broker's
00:50clients.
00:51They're losing money every day in interest payments, and it's making them falling behind
00:59paying their home loans off as soon as possible.
01:02Adding to the pain, wage growth has fallen to its lowest level in more than two years,
01:07slowing from 3.6% in the year to September, to 3.2% in 12 months to December.
01:14That's in line with the RBA's forecasts.
01:17Australians are still getting a real pay rise though.
01:21With wages rising above inflation, thanks in part to rent and energy subsidies.
01:27While borrowers wait for lenders to pass on the Reserve Bank's rate cut, the RBA Governor
01:32has poured cold water on the prospect of the relief ramping up.
01:37However, Michelle Bullock's caution is also by design, to prevent spending sprees which
01:42could see inflation rise again.
01:45We think that there's only one more interest rate cut coming this year, and we think that's
01:49likely to arrive in the third quarter of this year.
01:51Welcome news for this family, when it comes.