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Author: Real Estate Institute of Australia
The Reserve Bank of Australia’s decision to cut interest rates will help affordability
for home buyers, according to the Real Estate Institute of Australia (REIA).
REIA President Adrian Kelly said the second cut in as many months is a major boost to housing
“Subject to the banks passing on the cuts in full this means that
for each $100k borrowed, annual payments decrease by $500. For a first home
buyer, who in the March quarter of 2019 who have an average loan size of $338k this
means a saving of $140 per month.
“REIA’s Housing Affordability Report for the March quarter 2019
showed that the proportion of income required to meet loan repayments decreased
to 30.3 per cent over the quarter, a decrease of 0.9 percentage points and a
decrease of one percentage points over the past year.
“The two interest rate cuts in consecutive months would see this proportion
decrease to 28.6 per cent, the lowest
since 2003 and comes at a most opportune time for first home buyers.
“Unlike the last series of cuts in 2015 and 2016 which stimulated
the housing market through increased investor activity this cut will stabilise
“It is first home buyers that that will benefit most with the
number of first home buyers decreasing nationally to 8,010 in April with the
average for the first four months of 2019 being 8,319, down by 1,100 per month
compared to the last four months of 2018,” Mr Kelly said.
For more information from REIA, visit their website.
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