The Reserve Bank of Australia’s (RBA) decision to raise the official cash rate by 25 basis points may help the market avoid harsher rates in the short to medium outlook.
According to real estate RE/MAX WA owner Geoff Baldwin, while the market has been showing signs of a rapid recovery, it would not be able to sustain another boom situation where prices skyrocket causing interest rates to follow.
“The real estate market is usually the catalyst for any financial recovery and historically it has led most financial booms hence it is critical on this occasion we manage and encourage sustainable long term growth rather than allow a roller coaster effect,” he said.
“There may be one more quarter percent rise over the next couple of months however this should be enough to ensure we keep a lid on rapid price increases whilst still allowing healthy sales volumes.
“Rather than a situation where property prices go through the roof over a short period only to be followed by high interest rates, doom and gloom, it is encouraging to see the Reserve Bank board taking action now to even out the road ahead.”
Mr Baldwin said property prices would continue to gather steam thanks to the strong local economy, the undersupply of land and a host of other positive factors.