The Real Estate Institute of Australia welcomed today’s Reserve Bank of Australia’s second rate cut for this year, which has dropped the official interest rate to a new record low since the late 1950s.
“With an official interest rate of just 2.0 percent, most home owners can expect to be paying an average of 5.3 percent and so the RBA Board’s decision will help home owners on an average loan by around $70 per month but the lenders need to pass on this rate cut to borrowers in full," said REIA President Neville Sanders. “The recent low rates have allowed many Australians to enter the property market, however borrowers should remember that interest rates will inevitably rise as the economy strengthens and they should not overreach themselves."
Sanders said a cut in the cash rate will be very important in boosting consumer and business confidence. “Since the RBA began downward movements of the official interest rate in late 2011, the proportion of the median family income required to meet monthly loan repayments has decreased 3.3 percentage points from 34.8 percent to 31.5 percent,” Sanders concluded.