RBA cuts to lowest rate in Australian history
The Reserve Bank of Australia has slashed interest rates to a record low of 1 per cent for July 2019, paving the way for buyers to re-enter the housing market, and offering repayment relief for existing home owners.
RBA Governor Dr Phillip Lowe said the back-to-back cuts (the first since 2012) are intended to help an economy that had slowed below trend.
"This easing of monetary policy will support employment growth and provide greater confidence that inflation will be consistent with the medium-term target,” he said in his post-meeting statement.
“It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target.
“Over the year to the March quarter, the Australian economy grew at a below-trend 1.8 per cent. Consumption growth has been subdued, weighed down by a protracted period of low-income growth and declining housing prices. Increased investment in infrastructure is providing an offset and a pick-up in activity in the resources sector is expected, partly in response to an increase in the prices of Australia's exports.
“Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.”
Related: Reserve bank cuts to record lows
Great time to move for buyers, owners
Interest rates are already at historic lows, and if lenders respond to the RBAs move by slashing their interest rates, there is an even more compelling case for buyers who may have been holding off to assess their options and enter the market before a later surge.
If banks choose to pass on the rate cut in full, the quarter percentage point cut should translate to approximately $21 a month in repayments on a $150,000 30-year mortgage, or $65 a month on a $450,000 30-year mortgage.
If your bank doesn't pass on a cut, it's a great time to discuss your options with them and champion a better deal.
The mood around property in Australia has started to take a positive turn. CoreLogic property data for June showed home values in Sydney and Melbourne rising for the first time since 2017, and prices are showing signs of stabilisation elsewhere.
"Resimax is seeing this swing in action, with strong across our Victorian master-planned communities from both local and international buyers," said Resimax Chief Operations Officer Darren Mehl.
"We expect this momentum to build in coming months, making this an ideal time to enter the market - especially first time buyers.
"If people are unsure what their next move should be, they can talk to our team of financial and property specialists, who can provide them with no-obligation insights about their options and opportunities."