RBA cut's impact on WA market

By Kay Rivera | 06 Jun 2019

The Reserve Bank of Australia recently decided to cut its official interest rate to a record low of 1.25%, but an industry professional said it would not be enough to boost Perth or Western Australia market.

Economists and housing industry representatives believe that the market needs sustained jobs growth and population growth, according to a report by ABC News. The 0.25-percentage-point rate cut would only impact the state's economy and housing sector at the margins, said John Nicolaou, ACIL Allen Consulting executive director in WA.

"Ultimately, interest rates were already very low, and so I think the community at large will be relatively immune to interest rate cuts unless they are of a particular scale of magnitude," Nicolaou told ABC News. "But certainly at the margin, a 25-basis-point cut will give a real boost to consumer spending and potentially to the property market as well."

He said the drive for long-term growth would come from the stability of the resources sector, as well as state and federal policies that could boost investment and result in more jobs.

Perth's housing market has been cooling since the end of the state's mining boom. The city’s prices dropped by 1% last month— the worst result in the country after Darwin. The median house value sat at $436,000.

WA President Damian Collins expected the rate cut could help to change the situation but also acknowledged that prospective buyers are waiting for signs of recovery.

"[It] will certainly make people feel a bit more confident about borrowing. Having said that, people still want to see signs the Perth market is recovering before a lot of people will come back into the market," Collins told ABC News.


Top Suburbs : windale , stafford hts , nundah , queens park , east victoria park


Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local mortgage broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here