After the first rate drop of 1.25 per cent announced by the Reserve bank in June they announced a further decrease to 1 per cent at the beginning of July.
The Reserve Bank made the decision to decrease the cash rate to “support employment growth” and “provide greater confidence that inflation will be consistent with the medium-term target”.
What does this mean for the property industry?
The lower rates will assist in supporting Australia’s slowing residential market.
Senior economist at Capital Economics Marcel Thieliant predicts that the RBA’s rate cut is expected to assist in the ending of the housing downturn.
The low cash rate does not only mean that people won’t be paying back as much interest on their property loans, but it also means that people are able to borrow more. This can generate house prices to increase.
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