In a move widely predicted by economists, the Reserve Bank of Australia has decided to cut the official cash rates by 25 percentage points to an all-time low of 1.5 per cent.
The latest cut means that the official cash rates has now fallen by 3.25 percentage points since November 2011 with the last cut seen in May this year, following weak inflation data.
Weak inflation seems to be the culprit for the latest rate cut too, along with slow growth in employment, a high Australian dollar and global uncertainty.
What will the lower cash rates mean for the property market?
While a cut in interest rates can boost up property markets, and we have seen this in the past, it’s looking less likely that it will have a major effect this time around due to the Australian Prudential Regulation Authority’s ongoing tightening of lending criteria.
The rate cut will however see some property growth and will be a big help for those markets that have been seeing slow or falling growth, it will also be very much welcomed by sellers and mortgage holders.
With the cheapest interest rates in history, it will also be good news for those looking to step onto the property ladder, however housing affordability will still be an issue for many and interest rates cuts can make it harder to save for that home deposit.
But if you are in a position to buy then now is great time to start looking at your options and taking advantage of the lowest rates in Australia’s history.
Just remember that you do need to shop around to find the best home loan deals. Not all home loans are created equal and not all lenders will pass on the rate cut or offer it upfront.
For help finding the home loan packages talk to the team at Professionals Finance.