Ensure you never miss an issue of the
real estate business bulletin
REIA slams rate rise

REIA slams rate rise

by Reporter 0 comments

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.”

le>.b-autolinks{text-decoration:underline}.b-autolinkshadowbox { display: inline; position: relative; cursor: pointer; color: #428bca;} .b-autolinkshadowbox:hover > span { display: block !important; } .b-autolinkshadowbox__links { white-space: nowrap; z-index: 999; display: none; left: 0; border: 1px solid #bfbfbf; border-radius: 5px; font-size: 12px; top: 12px;color: #000; padding: 10px; position: absolute; background-color: #FFF; box-shadow: 0px 0px 20px 1px #bfbfbf; } .b-autolinkshadowbox__links > a { display: block; padding: 3px 0; }
REIA slams rate rise
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?