Mixed reaction to RBA decision

Mixed reaction to RBA decision

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The RBA’s decision to leave interest rates on hold at 2.75 per cent offers vendors an opportunity to reach a greater audience, according to Laing+Simmons.

Despite suggestions of a strictly buyer's market, Laing+Simmons general manager Leanne Pilkington believes current market conditions may also favour vendors. 

"The decision to leave interest rates on hold after last month's cut, which was perhaps surprisingly embraced by the major lenders, maintains the attractive fundamentals for the vendor's side of the equation, as well as the buyer's," she said.

"From an agent's perspective, there is a dearth of stock coming to market and those properties that are available are capturing broad interest. Where realistic price points are adopted, vendors are reaping the rewards.

"Demand from buyers is strong and should remain resilient throughout the winter months, so properties that do come to market can be expected to be the subject of strong competition."

Meanwhile, the Housing Industry Association (HIA) has voiced their disappointment at the result.

"We are disappointed that the RBA did not cut rates again, following on from last month's reduction," said Shane Garrett, HIA's senior economist.

"A reduction in rates would certainly have been warranted - inflation is well within target, while economic activity is struggling in many important sectors like home building," Mr Garrett said. "A one-off cut in May without immediate follow-up in June simply adds to business and household uncertainty.

"Our recent policy manifesto, Housing Australians, underlines that house building is substantially lower than a decade ago, despite the fact that the population is at a record high. A continuation of this trend will mean an acute shortage of housing will emerge by the end of this decade," he warned.

Mr Garrett concluded that he would like to see further interest rate cuts to follow swiftly.

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