ANZ joins rivals, hikes rates
ANZ has joined its rivals in hiking standard variable interest rates, lifting rates for home owners by 0.18 percentage points to 5.56 per cent.
ANZ is the last of the big four banks to hike mortgage rates in response to tighter capital adequacy terms imposed on the banks by the Australian Prudential Regulation Authority.
Westpac, which was first to raise its rates, hiked by 20 basis points (0.2 per cent). Commonwealth Bank raised by 15 basis points and National Australia Bank was in the middle of the pack with a 17 basis-point rise.
The moves are expected to further dampen demand in the housing market, which many observers think is overheated – particularly in Melbourne and Sydney.
In early October, Macquarie Bank forecast that house prices were likely to fall 7.5 per cent on average in 2016.
Labor has fiercely criticised the banks for the out-of-cycle rate rise, with opposition leader Bill Shorten calling the hikes “nothing but a rip-off”.
Economists expect the moves to put greater pressure on the Reserve Bank to further cut rates at its November meeting.
The RBA is known to target end-user rates rather than the overnight cash rate itself – meaning out-of-cycle rate rises give it more scope for offsetting cuts.