Interest rates remain on hold at 2.5 per cent after the Reserve Bank of Australia’s October board meeting today (7 October).
REINSW President Malcolm Gunning said it was good to see that RBA board had chosen not to use interest rates to deter the purchase of property.
“There has been much speculation over the last few weeks about what the RBA would do to dampen current interest in property and concerns over an inflated property market.
“We are glad that the RBA has seen sense and has not chosen to lift interest rates at this time. A better course of action related to the ability to service debt is to restrict low loan-to-value ratios (LVR),” Mr Gunning said.
“Using a broad tool such as interest rates to affect one sector of the market is unjust on all areas of the market and is inappropriate.
“We ask those who are seeking to purchase property to review their finances carefully and ensure that they factor in a buffer for future interest rate rises. Larger deposits and the ability to add value to a property as well as a longer term investment strategy are important to ensuring that people do not get into financial difficulty,” Mr Gunning said.
The official cash rate has fallen 225 basis points since November 2011, with the RBA cutting interest rates twice in 2013 in May and August.
The RBA will next meet on Tuesday, 4 November 2014.
For further information or to arrange an interview with REINSW President Malcolm Gunning please contact Helen Hull at [email protected] or 0419 642 961.