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REIA claims little response so far to rate cuts

The latest rate cuts have done little to stimulate the Australian property sector, the REIA has claimed.

The Real Estate Institute of Australia (REIA) has argued there has so far been little response in the housing market to rate cuts which took place in May and June this year.

According to the organisation, the overall value of Australian property investments was down by 0.4 per cent in July - the fourth consecutive month of reduction.

REIA president Pamella Bennett commented: "In trend terms, increases were recorded in Western Australia, Victoria, Tasmania, South Australia and the ACT. All other states and territories recorded decreases."

She added that as a result, the Reserve Bank of Australia (RBA) was possibly wrong not to have reduced rates further.

Her comments follow the announcement by the RBA that it has held the cash rate at 3.5 per cent for a further month.

Minutes from the bank's meeting yesterday (August 7th) cited the softening global economic outlook and positive employment growth in labour markets as the main reasons for this cautionary stance.

Posted by Craig Francis

- REIA, interest, rates, property, employment, RBA, economy

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