Rate Cut Will Help Affordability Says REIA
In welcoming the cut in the official interest rate by the RBA, the Real Estate Institute of Australia (REIA) says it will help affordability for homebuyers and stabilise the housing market.
“Subject to the banks passing on the full cut this means that for each $100,000 borrowed annual payments decrease by $250. For a first homebuyer, who in the March quarter of 2019 had an average loan size of $338,000 this means a saving of $70 per month,” REIA President Adrian Kelly said.
“This will further improve affordability with REIA’s Housing Affordability Report out showing that in the March quarter 2019, the proportion of income required to meet loan repayments decreased to 30.3 per cent, a decrease of 0.9 percentage points over the quarter and a decrease of 1.0 percentage points over the past year.
“Unlike the last series of cuts in 2015 and 2016 which stimulated the housing market through increased investor activity this cut will stabilise the market which is already showing signs that the rate of price falls is declining rapidly.
“It is first homebuyers that that will benefit most with the number of first homebuyers decreasing nationally to 23,403 in the March quarter 2019, down 19.7 per cent for the quarter and a decrease of 11.6 per cent compared to the corresponding quarter in 2018,” Mr. Kelly concluded.