Mortgage Rates On Hold - For A Month At Least
Illawarra Mercury
Thursday March 4, 2004
HOMEBUYERS have won another month's grace on higher mortgage payments, but news that the economy ended 2003 with a bang has created expectations of further hip-pocket pain to come.
The national accounts showed the economy grew a healthy 1.4per cent in the December quarter, the best performance in four years.
Annual growth lifted to 4per cent amid strong consumer spending and rural recovery.
But two back-to-back interest rate rises last year and the stronger Aussie dollar are tipped to slow growth in 2004, and the Reserve Bank yesterday opted to leave rates on hold for the third month in a row.
Treasurer Peter Costello said Australia had regained top place in the performance table for developed economies, despite suffering a hammering from the drought.
``An annual growth rate of 4per cent puts us again at the top of the league of the developed economies of the world," he said.
``Having come through that difficult drought, the prospects for Australia are for a strong continuing economy in the midst of a global recovery."
But Mr Costello repeated warnings to households not to get carried away by feelings of optimism.
``The only thing I would say to people is ... don't over commit yourself, bear in mind that whilst property prices rise, there can be corrections in the market and don't over-extend yourself," he said.
Most economists still expect another rate rise by mid-year to keep growth sustainable.
MERCURY BUSINESS - P48
© 2004 Illawarra Mercury
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