The housing industry has been reacting to the Reserve Bank of Australia’s cut in interest rates. The new rate of 2.25 per cent comes into effect today. Harley Dale, chief economist of the Housing Industry Association noted that the move will support the house building industry and help maintain the buoyant levels of supply but he was more cautious on another message from the RBA announcement: “The RBA hinted at a further elevation in the use of macro prudential tools to restrict mortgage lending in a targeted manner. Care needs to be taken that any such action does not have adverse impacts on confidence and activity in the broader residential market.”
Source: Housing Industry Association
Realtors’ body says rate cut must be passed on by lenders
While an interest rate cut by the RBA makes a swift difference to the banking sector the rest of us only benefit if they pass the cuts on. The president of the Real Estate Institute of Australia says the rate cut must be passed on fully by the lenders for the market to get the most benefit. Neville Sanders welcomed the move by the RBA saying that “housing affordability in Australia will improve further” as a result. He noted that it would boost confidence and make a real difference to household budgets: “Since the RBA began its cutting of the official interest rate in late 2011, the proportion of the median family income required to meet monthly loan repayments decreased from 34.8 to 30.4 per cent.” Mr Sanders call for rates to be passed on “fully” is perhaps in reference to the recent interest rate cut in Canada where some banks cut 0.25 per cent from the rate it pays savers but only 0.15 per cent from mortgage rates.
Source: Real Estate Institute of Australia
There are more first-home buyers than we thought
The number of first-home buyers is higher than previously thought according to the Australian Bureau of Statistics which is changing its method for recording the monthly figures. The ABS has identified that many lenders have only been reporting loans where the buyers have received a first-home buyer grant and those that were not eligible were wrongly excluded from the data. It is in the process of working with lenders to ensure that this is corrected and has worked out a model for better assessing the numbers in the interim.
Source: Australian Bureau of Statistics
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