What Does The RBA Cash Rate Cut Mean For the Queensland Property Market?

Journal, Property Market,  Buyers and sellers,  Principals,  Property Managers,  Salespeople

Stealing the limelight from the race that stops the nation, yesterday the Reserve Bank of Australia (RBA) cut the cash rate to a historic new low of 0.10 per cent.

The cash rate cut is a welcome attribution to the post-pandemic economic recovery. It is expected to support the creation of jobs as well as increase housing demand.

The complete RBA package announced:

  • A reduction in the cash rate target to 0.1 per cent;
  • A reduction in the target for the yield on the three-year Australian Government bond;
  • A reduction in the interest rate on new drawings under the Term Funding Facility to 0.1 per cent;
  • A reduction in the interest rate on Exchange Settlement balances to zero; and,
  • The purchase of $100 billion of government bonds of maturities of around five to 10 years over the next six months.

What does the RBA cash rate cut mean for Queensland?

Supporting Queensland’s progressive property market, the new package announcement will make it easier for individuals to access home finance.

“Queensland’s affordability and liveability continue to be its greatest assets, as buyer interest continues to increase month on month. It’s very pleasing to see many renters make the transition to homeownership too. With a diverse range of housing options on the market, if you shop around you may actually be better off financially owning a property rather than renting one. With historically low-interest rates and the RBA cutting the official cash rate to 0.1 per cent; it’s never been cheaper to access home finance. Particularly for first home buyers who have the added benefit of a range of government grants to help support them further,” says Antonia Mercorella, Chief Executive Officer at the Real Estate Institute Queensland.

The RBA announcement complements the initiatives from the Federal Budget. Particularly benefitting homeowners and buyers who were previously relying on pandemic financial support.

“The stimulus of such extremely low-interest rates, together with the initiatives announced in the federal budget and state-level incentives like stamp duty concessions and building grants, are likely to be enough to outweigh the headwinds facing the market. Headwinds include the wind-down of fiscal support such as JobKeeper, and the expiry of home loan repayment deferrals, which are moving through their peak period of expiry this month,” says Tim Lawless, Head of Research at CoreLogic.

every dollar counts

The initiatives are expected to be a positive influence on Queensland’s property market. However, the REIQ is urging real estate professionals to encourage buyers, sellers and landlords to ensure that the interest rate cut is wholly passed on by their bank.

“At the moment, the average variable rate is 3.34 per cent p.a. If lenders pass on the 0.1 per cent cut in full, the new average will be 3.19 per cent p.a. This equates to saving $33 a month for an owner-occupier, making principal/interest repayments on an average $400,000 home loan. We certainly encourage homeowners to shop around if their current lender does not pass on the full rate cut. Every dollar counts, particularly during the current pandemic climate,” says Ms. Mercorella.

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Great training course was very informative. I feel I gained lots of knowledge and there is a lot of support from the REIQ team online, via phone and in person and am looking forward to starting my career in the real estate industry!
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I found the REIQ Real Estate Licence Online Training Course was very good, easy to access, with brilliant course materials to read and assignments that really checked on your understanding of the details of every aspect of real estate practise. I enjoyed the course even though it took a few months due to working full time and found the support of the trainers and assessors very helpful and encouraging. Thanks REIQ Training team for helping me through!
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I would like to share with you our experience that we have recently had through the REIQ Professional Development Team.We have had an awesome start to 2020 thanks to the great service provided by the REIQ Professional Development Team. Congratulations to Liz who started and finished her Certificate of Registration Course with the REIQ in December 2019. She loved the training, particularly the fact the trainers are experienced and still walk the talk and are active in real estate. Fast turnaround for marking of the assessments with help on hand by way of tutoring if needed meant she could get the Application to Office of Fair Trading for her registration happening quickly. We are thrilled, from start to finish with the course and application to Fair Trading she had her Certificate of Registration within 5 weeks. Really impressed with the training, help and support team REIQ gave Liz and the quick processing time by the Office of Fair Trading.We also regularly use the Property Management Support Service and General Agency Advice Service and believe it offers great value for our membership. The PMSS team provide practical advice by practising property management professionals who can relate to the everyday challenges property managers face.Keep up the good work Team REIQ,
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