PHOTO: The RBA cut rates to a historic low of 0.1 per cent. (AAP Image/Joel Carrett) Source: AAP
The RBA’s historic recent rate cut could force the hand of many potential buyers, with early signs already showing an uptake in demand for property.
The Reserve Bank of Australia governor Phillip Lowe does not expect buying to become excessive in the housing market following the board’s Cup Day cash rate cut to the historic low of 0.1 per cent.
In the past he would have worried lower interest rates would encourage people to borrow more and push up housing prices.
“We are going to have to watch that carefully, but I think the dynamics of the housing market has changed,” Lowe said. “Population growth is slower, investors are seeing rents fall at the fastest rate that we have ever seen, the vacancy rate is quite high.
“So at the moment I’m not particularly worried about causing excesses in the housing market,” adding his main worry was jobs.
But there is early anecdotal evidence coming through from auctions, especially across Sydney, suggesting otherwise.
RBA governor Philip Lowe. Britta Campion / The Australian Source: News Corp Australia
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