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RBA slashes cash rate to 0.25% to help boost economy

4Mo ago 0 Replies 83 Views
The Reserve Bank of Australia has taken the unprecedented move of slashing interest rates to 0.25% – the lowest in Australia’s history – as part of a comprehensive package to ease the economic blow of Coronavirus.
Today’s emergency trigger was pulled more than two weeks ahead of the RBA’s regular meeting, on the first Tuesday of every month.

The impact the cut will have on the property market is positive, but it is unlikely to have the same affect on pricing as the last four cuts, according to realestate.com.au chief economist, Nerida Conisbee.
“With COVID-19, we are likely to see economic growth slow significantly and there continues to be a high degree of nervousness amongst consumers.

“We don’t yet know whether we are in for house price falls, but there is no doubt the cut, as well as all the other stimulus measures being introduced, will cushion the impact,” she says.
The Federal Government is expected to release a second round of stimulus measures in the coming days – a week after announcing a $17 billion package to pump up the economy amid the COVID-19 crisis.

Interest rates can’t go any lower – the RBA has already said 0.25% is its lower bound.
Low rates could act as stimulus upon recovery
Low interest rates are generally seen as a positive for the residential property market, but in the current situation the positives could come in the long-term, according to realestate.com.au executive manager of economics, Cameron Kusher. 

Mortgage holders breathe a sigh of relief
As well as presenting an opportunity for home owners to get ahead on their mortgage repayments, today’s rate cut will be welcome news for mortgagees who may be struggling financially amid the uncertainty brought on by Coronavirus.
Smartline chief executive, Sam Boer, says the banks have put measures in place to assist those in financial hardship.
“I would advise people to get in touch with their broker or lender if they are concerned about keeping up with their loan repayments.”


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