The Reserve Bank has affirmed industry speculation by cutting the official cash rate at its board meeting earlier today.
The 25 basis point rate cut officially takes the cash rate to its lowest point ever – with the rate now sitting at just 2.5 per cent.
RBA governor Glenn Stevens said the rate cut was a wise move for the board, as data released earlier this month found headline inflation was considerably weaker than expected.
The historic decision by the Reserve Bank to cut interest rates to 2.5 per cent today will be welcomed by families, investors and first times buyers, according to LJ Hooker - Australia’s leading network of real estate agents.
L Janusz Hooker, deputy chairman at LJ Hooker, winner of Best Major Network at the recent Australian Real Estate Awards has said that the historic cut coinciding with the announcement of the September seven federal election should result in a bumper spring market.
“This is completely new territory but if it follows the trend of previous cuts, it will further boost property prices and will be seen as a bonus by mortgage holders regardless of their political followings,’’ he said.
“An early election is good for the property market because it is the start of the spring selling season and people can now make a decision without any uncertainty.
“The election won’t make any difference to property sales because interest rates are at an all-time low and affordability will improve regardless of the political outcome.’’
Laing+Simmons general manager Leanne Pilkington agrees today’s decision is a shot in the arm for the real estate market.
“The reduction in interest rates combined with the certainty we now have in terms of the election date should provide buyers and vendors with the confidence they require to proceed with their real estate plans,” he said.
“The clarity around the election removes some of the uncertainty in the market, a market in which there is already of dearth of available stock.”
Richardson & Wrench executive director Andrew Cocks today welcomed the RBA’s decision to cut interest rates which he said would help to sustain a recovering real estate market.
“Confidence is the key motivator in real estate and we are seeing that return, not only due to interest rates but other factors such as an improvement in the US economy and an extended period of stability in Europe,” he said.
“The green shoots of recovery have been evident across all areas of NSW including popular retirement destinations that have struggled since the GFC.”