RBA cash rate cut to benefit those buying a house
As of today May 8, the cash rate has been lowered to 2.75 per cent by the Reserve Bank of Australia (RBA).
This signifies a drop of 25 basis points, making it the lowest rate in 53 years.
Down from three per cent, it is already being welcomed as good news for those looking at buying a house by industry experts.
Real Estate Institute of Australia (REIA) president Peter Bushby was one of the first to welcome the cut.
"The market has remained relatively flat and housing affordability has been very slowly improving over the past five quarters. Potential home buyers need encouragement to enter the market and this pre-Budget cut is most welcome," he said in a statement on May 7 after the announcement.
He added that for the effects to be truly felt through the residential property market, banks around the country will need to drop their rates in kind.
In a statement from governor Glenn Stevens, he explained one of the reasons for the cut: "There has been a strengthening in consumption and a modest firming in dwelling investment, and prospects are for some increase in business investment outside the resources sector over the next year."