The Reserve Bank of Australia has cut interest rates by 25 basis points to 2.25 per cent at its first meeting of 2015.
REINSW President Malcolm Gunning said the decision at the February Board meeting was largely anticipated by economists.
“It was widely expected that the RBA would cut interest rates today,” Mr Gunning said.
“We believe that this decision will help with consumer confidence. However while the property market will continue to benefit from the low interest rate environment, the growth levels seen in 2014 are not expected to continue this year.
“Low interest rates have been a great boost to the New South Wales economy and have created the perfect storm for a construction boom.
“It is now time for the state government to recognise the role it pays in the property market and reward first home buyers with extra incentives, including the grants to purchase existing properties,” Mr Gunning said.
The official cash rate has fallen 250 basis points since November 2011, including today's decision, with the RBA cutting interest rates twice in 2013 in May and August and leaving interest rates on hold for the entirety of 2014.
“We must once again caution mortgage holders that the current record low interest rates will come to an end. It is important not to over-commit yourself and be prepared for future rate rises,” Mr Gunning said.
The RBA will next meet on Tuesday, 3 March 2015.
For further information or to arrange an interview with REINSW President Malcolm Gunning, contact Helen Hull at [email protected] or 0419 642 961.