RBA lowers OCR to 2.5 per cent

The-Reserve-Bank-of-Australia-has-lowered-the-Official-Cash-Rate-by-a-further-25-basis-points_16000816_800510533_0_14085403_300The Reserve Bank of Australia (RBA) has lowered the Official Cash Rate (OCR) to 2.5 per cent, which is great news for any first time home buyers who are considering purchasing Sydney property.

In a statement released August 6, RBA Governor Glenn Stevens announced the decision had been made because the Australian economy is still adjusting to a general decrease in mining investment.

With unemployment increasing and the pace of borrowing remaining relatively subdued, Mr Stevens said the RBA made the decision to lower the OCR by a further 25 basis points.

“At today’s meeting, and taking account of recent information on prices and activity, the Board judged that a further decline in the cash rate was appropriate,” said Mr Stevens.

The governor also left the door open for further easing in the future, should it be required. The RBA has already lowered the OCR by 2.25 per cent since the latest cutting cycle began towards the end of 2011.

Both the Real Estate Institute of Australia (REIA) and the Real Estate Institute of New South Wales (REINSW) have applauded the decision.

REIA President Peter Bushby has estimated that the average monthly loan repayment for Australian mortgage holders will decrease by $100 if banks choose to pass the cut on in full.

“Housing affordability would improve by 4.7 per cent with the proportion of the median family income to meet average loan repayments decreasing from 29.9 per cent to 28.5 per cent,” said Mr Bushby in a statement released August 6.

Meanwhile, REINSW President Christian Payne believes that while the decision is “a win for everyone”, it will particularly benefit people looking to purchase their first home.

The next RBA meeting is scheduled to take place on September 3, and the real estate industry will be paying close attention to see whether further cuts are in store.

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