Interest rate cut to stimulate the property market

At its monthly meeting in Sydney last week, the Reserve Bank of Australia (RBA) elected to reduce the official cash rate by 25 basis points to 3.5 per cent. This decision was welcomed by CENTURY 21 and we expect that it will inject some much needed stimulus into the residential property market.

Speaking on the RBA’s second consecutive monthly cut, Chairman of CENTURY 21 Australasia, Charles Tarbey, said: “This latest rate cut will put further pressure on banks to increase the competitiveness of their interest rate terms, which should increase housing affordability and therefore incentivise prospective buyers to invest.”

The RBA’s decision followed several months of heightened concerns surrounding European economic conditions, turbulent global financial markets, weakened consumer confidence and falling national home values.

Released a week prior to the decision were RP Data-Rismark figures that showed median house prices across Australian capital cities had fallen 1.4 per cent in May. 

That same week the Australian Bureau of Statistics released figures, revealing that residential building approvals had fallen 8.74 per cent in April, reaching their lowest levels since January 2009.

In his statement following the meeting, RBA Governor Glenn Stevens cited international economic uncertainty, weakening financial market sentiment, modest domestic growth and favourable inflation forecasts as key factors behind the decision. 

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert, clear advice. Additionally, if you would like to speak to a mortgage professional about the impact of this rate cut on your mortgage, or to find out more about suitable loan packages for your circumstances, please contact CENTURY 21 Home Loans.

Posted by Charles Tarbey on 12/06/2012 at 9:59 AM | Categories:


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