At its December meeting held in Sydney last week, the Reserve Bank of Australia elected to cut the official cash rate by 25 basis points to 4.25 per cent. This was the second consecutive cut to rates made by the Reserve Bank, after a year of keeping rates on hold at 4.75 per cent.
This decision should assist both prospective residential property buyers and current mortgage holders in the lead-up to Christmas, particularly now that each of the big four banks (ANZ, Commonwealth Bank, Westpac and NAB) have passed on the rate cut to their customers in full.
In response to the decision, Century 21 Australian Chairman and Owner Charles Tarbey said that for prospective property buyers who have been in a position to make a purchase this year yet have refrained from doing so, the rate reduction could be the final encouragement needed to act on a suitable purchase.
In his statement following the decision, Reserve Bank Governor Glenn Stevens in part attributed the rate cut to conditions in financial markets and cautious behaviour by firms and households, saying that:
"Financial markets have experienced considerable turbulence, and financing conditions have become much more difficult, especially in Europe. This, together with precautionary behaviour by firms and households, means that the likelihood of a further material slowing in global growth has increased."
Charles Tarbey noted of the decision that conditions in the international financial markets continue to have an ongoing impact on many Australians, with many home owners and investors exposed either directly or indirectly.
As mentioned, now that the rate cut has been passed on in full by the four major banks, this reduction will hopefully help to ease the financial pressures felt by many Australian property owners and mortgage holders, particularly in the lead-up to the often expensive Christmas period.
For those prospective buyers who have sought the appropriate professional advice and are financially positioned to do so, the rate cut may also help to make a property purchase more viable.
For more information about suitable properties available for purchase in your local area, please stop by one of the hundreds of Century 21 real estate offices nationally to speak to an experienced property professional.