Cash rate cut should assist those buying a property
There was good news for anyone thinking about buying a property earlier today (June 5), as the Reserve Bank of Australia (RBA) opted to reduce the cash rate by 25 basis points.
This will hopefully mean that mortgage lenders will lower their interest rates, effectively making the cost of getting on the property ladder more affordable for first home buyers.
It had been widely anticipated that a rate reduction was on the horizon, especially as financial conditions across Australia and the rest of the world started to decline.
RBA governor Glenn Stevens explained that as a result of previous changes to monetary policy, interest rates have started to decline for borrowers and are now below the medium-term average.
Not only this, but house prices started to stabilise at the turn of the year and have now started to decline again.
Figures from RP Data recently showed how residential property has become more affordable so far this year, declining by 1.2 per cent in the three months to April.
Over the past 12 months, prices fell by 1.5 per cent, suggesting now could be the best time to make a property investment.