The Reserve Bank delivered a stunning boost to the housing market this afternoon.
It cut the official interest rate by half a per cent – double what had been widely tipped.
If banks pass on the full 50 point cut, it will mean an average mortgage will be almost $100 a month cheaper.
Dannielle DePinto reports.
New home sales have dropped almost 10 per cent in recent months and it’s now at its lowest level in 10 years.
The housing industry is struggling because home buyers are no longer confident in the ever changing market.
Homeowners who made the decision to buy, remain cautious of interest rates.
Alison Nicol, Homeowner: “The interest rate could go anywhere in the future, so it’s really an uncertainty.”
‘For Sale’ signs have stayed put, while renting became the more affordable option.
Alison Nicol, Homeowner: “It’s almost likely of becoming a country of people who’d rather rent.”
But buyers are not the only ones affected by high interest rates.
Builders and sub-contractors have also lost jobs in wake of the slow building uptake.
Warwick Temby, Executive Director HIA: “There’s been a lot of sub-contractors in particular from the industry move to the mining and resources sector to get work.”
The Reserve Bank’s bold move to slash the official rate by 50 points, is the largest single cut since February 2009.
Consumer confidence remains low at the moment, but the interest rate cut is a step in the right direction.
Dannielle DePinto, QUT News.