The Reserve Bank of Australia has announced that it will cut the official cash rate to a new record-low of 2.25 per cent after being left on hold at 2.5 per cent since August 2013.

"For the past year and a half, the cash rate has been stable, as the Board has taken time to assess the effects of the substantial easing in policy that had already been put in place and monitored developments in Australia and abroad," said a statement from RBA Governor Glenn Stevens. "At today's meeting, taking into account the flow of recent information and updated forecasts, the Board judged that, on balance, a further reduction in the cash rate was appropriate. This action is expected to add some further support to demand, so as to foster sustainable growth and inflation outcomes consistent with the target."

The Real Estate Institute of Australia commended the decision to introduce a 25 basis point cut, bringing the figure to the lowest level since the late 1950s. REIA President Neville Sanders said the RBA Board has made a considered and accurate assessment of the property market taking into account economic headwinds Australia and the international community are experiencing. “The significance of the easing monetary policy is that housing affordability in Australia will improve further, however we need today’s cut to be passed on fully by lenders," said Sanders.

LJ Hooker CEO Grant Harrod said the RBA’s unprecedented move to stimulate the economy should propel the property market in areas like Brisbane, which has seen lower gains in the current housing cycle. “It is most likely to have an impact on markets across the country, particularly for first time buyers who have felt the pressure of price growth in certain markets over the past 18 months,’’ said Harrod. “This historic cut will give young people access to cheaper mortgages, something previous generations have not enjoyed, and will hopefully instill them with confidence to come back to the market.”

LJ Hooker National Research Manager Mathew Tiller described the RBA’s move as surprising, given the recent slump in oil prices and a lower Australian dollar, but said it was a positive move for the property market. “Any improved economic conditions means we will see interest in property continue on from its strong close to 2014," said Tiller.