The Reserve Bank's recent OCR rate cut caught the market by surprise, raising the question: "Did the bank get it wrong?"
Tuesday, May 13th 2003, 10:35PM
by The Landlord
The last thing the housing market needed was last month’s interest rate cut. Both the median house price and the volume of sales reached records in March while the number of housing consents hit the highest number in the month of March since 1977.
The sales figures come out the day before the Reserve Bank reviewed its Official Cash Rate (OCR) and were seen by some economists as putting paid to any chance of an OCR cut. But then the central bank took them by surprise and cut it by 25 basis points to 5.5%.
Through the mid-1990s, some thought former Reserve Bank governor Don Brash paid too much attention to the housing market. So is current governor Alan Bollard paying the housing market too little attention?
