Rate cuts 'make no difference to Gen Y'

Consecutive interest rate cuts have not encouraged young Aussies to start splashing the cash again.

A new poll conducted by mortgage provider Loan Market has found that 50 per cent of Generation Y members who are planning to buy a property believe the rate reductions have made no difference to them whatsoever.

Economists had predicted a sudden surge in home loan uptake when the Reserve Bank of Australia (RBA) trimmed the national cash rate by 50 points in May and a further 25 at the start of June.

However, it seems that many people are still wary about taking on extra credit at a time when finances are stretched.

The fact that most banks have withheld some of the interest rate cuts has also had an impact on people's attitudes.

Loan Market corporate spokesman Paul Smith said: "The pressure is on the RBA to further reduce the official rate at its next monthly board meeting and then we will see if this is passed on in full by lenders."

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