Property owners have been given a welcome piece of good news in the lead up to Easter, with the RBA deciding to leave the official cash rate unchanged at 4.75%.
While it came as no surprise, the decision to keep the rate on hold drew praise from property industry insiders, with the REIA stating that housing unaffordability demanded a soft approach to interest rates.
"The proportion of income required to meet home loan repayments increased 0.5 percentage points to 35.3% in December 2010, up from 34.8% in September 2010. Over the year, housing affordability decreased 4.6 percentage points," said REIA president David Airey.
With the long Easter weekend on the horizon, Mortgage Choice spokesperson Kristy Sheppard believes that the RBA’s decision is good news for house hunters.
"Potential and current mortgage holders can settle into eating their Easter eggs with extra glee, and I'd say the former group will now be more enthusiastic about using the upcoming long weekend for their property hunt," she said, adding that the decision to keep the rate on hold sits in stark contrast to the rate hike seen in the lead up to Christmas.
"Then, consumers were hit by a 0.25 percentage point cash rate rise followed by significant home loan interest rate rises above and beyond that by a number of lenders,” she said.
"The tune has definitely changed. Many lenders are now working hard to attract both residential and business loan customers by introducing special offers and incentives, readjusting their fixed rates downwards to compete with peers and bringing out a range of variable rate discounts.”
The RBA’s next interest rate decision will be made on 3rd May.
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