Barefoot Investor Scott Pape slams RBA's interest rate cut as hindering young people entering housing market
The latest interest rate cut delivered by the Reserve Bank of Australia has provoked a scathing reaction from the Barefoot Investor, who says potential homebuyers should be 'pissed off' by the move.
The RBA slashed the cash rate on Tuesday from 4.1 per cent to 3.85 per cent in its second interest rate cut for mortgage holders this year.
The move is expected to provide financial relief to cash-strapped Australian homeowners around the country, and the Big Four banks have confirmed they will pass along the rate cut to their customers
Barefoot Investor Scott Pape has slammed the central bank's decision however, claiming although the interest rate cut will help people with their mortgage repayments, it will not be as beneficial for young people trying to get on the property ladder.
Mr Pape has long been known as a finance guru since rising to fame after his best-selling and eponymous finance book 'The Barefoot Investor'.
'If I was a young person right now I would be pretty pissed off,' he told news.com.au.
'Every time a young person gets close, it just keeps getting more expensive.'
The Barefoot Investor also warned Labor's five per cent home deposit plan announced last month will do 'a lot of damage'.
The policy, set to come into force from January next year, will allow young Australians to put down a five per cent deposit to try and get a foot on the property ladder.
'(The policy's) stupid, totally stupid,' Mr Pape told news.com.au.
'People shouldn't be buying a home in one of the most expensive cities in the world if they can't afford it.'
Other industry experts also sounded the alarm over the plan shortly after it was announced, including Helia chief executive Pauline Blight-Johnston, who previously said the Labor government policy created a 'risk for lenders'.
'It is still important that the LMI industry is around to support investors and upgraders who all need access to LMI,' Ms Blight-Johnston said.
RBA Governor Michele Bullock called Tuesday's announcement a "confident cut", but also said she would be looking out for economic uncertainty from the ongoing US trade war.
"I think it's a confident cut in the sense that we think this is the right decision at this point in time," Ms Bullock told reporters.
"Where this leads us in the future is a little more uncertain. I'd have to say probably a lot more uncertain, given everything that's going on."
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Mr Pether was arrested following a dispute with the Iraqi government and his employer, a consulting firm working on headquarters for the country's central bank. He was sentenced in 2021 to five years in prison and fined millions of dollars. A United Nations report on arbitrary detention detailed allegations that Mr Pether was subject to extreme cold, humiliation, threats of death and forms of psychological abuse, including being shown a torture room. Foreign Minister Penny Wong welcomed Mr Pether's release. "I know the personal toll Mr Pether's detention has taken on him and his family and hope this news brings a measure of relief after years of distress," she said in a statement. "While Mr Pether remains subject to legal proceedings in Iraq, this is a positive development and follows persistent Australian government advocacy over many years. "His case has been raised with Iraqi authorities over 200 times, including at the highest level by the prime minister and myself." Mr Pether wrote a letter in 2024 expressing concern for his health. Senator Wong said officials would continue to press the case for the Australian in Iraq. "We will continue to support Mr Pether and his family and to advocate for Mr Pether's interests and wellbeing," she said. "I want to thank Australian officials for their tireless work on Mr Pether's case, including Australia's special envoy who travelled to Iraq in recent weeks to negotiate for this outcome." An Australian man detained in an Iraqi prison for nearly four years has been released on bail. Engineer Robert Pether was granted conditional release after being detained on misrepresentation and fraud charges. Mr Pether was arrested following a dispute with the Iraqi government and his employer, a consulting firm working on headquarters for the country's central bank. He was sentenced in 2021 to five years in prison and fined millions of dollars. 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