Improved Housing Figures show RBA Rate Cuts Helping
The latest Australian Bureau of Statistic (ABS) figures for housing finance have suggested that the Reserve Bank of Australia (RBA)’s cuts to the official cash rate over the last 18 months are finally having a positive flow-on effect in the housing sector.
In May, the RBA officially cut interest rates by 25 basis points to 2.75%, which is the lowest rate in over 50 years.
The ABS figures revealed that owner-occupied loans increased in the month of March by 5.2%, in terms adjusted seasonally, despite most analysts forecasting only an increase 4%.
Commenting on the improvement, chief economist with the Master Builders Association, Peter Jones, noted that despite the RBA cutting interest rates for some time, it had taken a while for the impact to flow through.
Jones stated that despite the current trend of rate cuts, lingering concerns regarding debt caused by the global financial crisis (GFC) had created the hesitancy, but he believes that the market is finally seeing some improvement and a return of confidence in the housing sector.