Powered by MOMENTUM MEDIA
realestatebusiness logo
Subscribe to our newsletter SIGN UP

REIA slams rate rise

07 October 2009 Reporter

The Reserve Bank of Australia’s decision to raise interest rates yesterday by 25 basis points has been criticised by the Real Estate Institute of Australia (REIA).

The REIA chairman, David Airey, said the RBA had been too hasty in its decision to raise rates.

He also said the rate rise was likely to be followed by a further 25 basis points increase next month.

“In home loan terms, I believe the variable rate will gradually rise from 5.5 per cent to around 7.5 per cent over the next 2 years,” Mr Airey told Real Estate Business.

“The RBA has lifted rates in response to the threat of a potential housing bubble. However, the risk of a bubble remains low with housing supply low and new dwellings down 50 per cent.

Mr Airey said that rather than waiting for the September figures and analysing the data carefully to see exactly where the market is moving the RBA acted on older information – the most recent being August figures.

Laing+Simmons general manager Leanne Pilkington was also disappointed see interest rates raised so soon after the first home owners boost was halved.

“This important incentive has assisted activity in the residential market and, despite being lowered, still has the potential to stimulate the lower end and improve affordability for those entering the market,” Ms Pilkington said.

“Today’s interest rate rise may cancel out some of the benefits of the boost by having a cautioning effect on that sector of the market. It would have been advantageous to ascertain the ongoing impact of the lowered boost prior to starting rates back on an upward cycle.”

REIA slams rate rise
lawyersweekly logo
FROM THE WEB
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast

Where is the biggest threat to agents in 2019?

3rd party lead generation companies
DIY models discounting sales commission
Prop-tech firms cutting out the agent value proposition
A yet unidentified proper disruptor – like Uber or Airbnb
None of the above. There is no threat.
Do you have an industry update?
REAL ESTATE BUSINESS NEWSLETTER
Ensure you never miss an issue of the Real Estate Business Bulletin. Enter your email to receive the latest real estate advice and tools to help you sell.