The Reserve Bank has lifted the official cash rate by 25 basis points to 3.50 per cent.
The rate hike is the second 25 basis point increase in as many months, after the Reserve Bank decided to raise rates last month for the first time since March 2008.
Raine & Horne’s chief executive officer Angus Raine said the rate rise would have little to no effect on the market.
“It was probably the worst kept secret, everyone knew rates would increase so they were able to factor it into their average monthly repayments, some time ago” Mr Raine told Real Estate Business.
“A 25 basis point increase will have no real impact on a borrower’s bottom line. Demand for housing has been steadily increasingly since Easter this year and this rate hike will not serve to dampen that demand.”
The twenty five basis point rise from the Reserve Bank will now take the average variable rate to 6.3 per cent, well below the 9.6 per cent peak recorded in July and August last year.