It was certainly an arresting headline: “Sydney ‘closed to first time buyers’, economist says,” the Weekend Financial Review reported last Saturday.

The story was based on Domain economist Andrew Wilson’s quote on the weekend clearance rate (81.4%).

“You only have to look back a year to see just how strong the market is,” he told the paper. “We have a debate about affordability because the Sydney market is basically closed to first-time home buyers. The level of investors is higher now than it was last year.”

The Reserve Bank obviously heard him. Their Melbourne cup Day gift was to leave interest rates at 1.5 per cent. But it’s really catch 22.

All those investors are buying property because they don’t see anywhere else they cash can earn a decent return. Giving them a better return would make loans more expensive and drive more first timers away.

The problem with low interest rates is that it encourages investors to seek returns by taking more risk. Not a good thing for anyone.

According to The Sydney Morning Herald’s Peter Martin, Reserve Bank governor Philip Lowe is actually upbeat about the future of our economy. “The board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”

The Australian was a little less upbeat, saying the RBA had expressed concern over jobs and house prices.

Over at the banks, that other great borometer, the Macquarie Group delivered a big dividend of $1.90 a share. Not that ordinary investors were seeing it. The Sydney Morning Herald reports this morning that Banks have cut term deposit interest rates again – the same rates “trumpeted by the industry as a sign it was balancing the needs of savers with borrowers.”

Raising term deposits by as much as 0.85% was their excuse for only passing on half of the Reserve Bank’s August rate cut to home loan customers. But Westpac , National Australia Bank and ANZ have reduced some of their term deposit rates in October, figures from Mozo showed.

Over at The Sun-Herald, Andrew Legget bemoaned the fact that only 36 per cent of Australians invested in shares, while 70 per cent of the adult population gambled on events like the Melbourne Cup.

In The Weekend Australian’s wealth section, James Kirby predicts a wave of renovations, gifts and “unusual investor behaviour” from retirees about to be hit by pension changes affecting 300,000.

On shares, The Sunday Telegraph tipsters suggest Metcash and Nick Scali as buys, and Fortescue, Bendigo Bank and Coca-Cola Amatis as sells.