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Rate freeze 'will help property to remain affordable'

The Reserve Bank of Australia should keep interest rates on hold in order to ensure that Australian property does not become unaffordable, the Real Estate Institute of Australia has claimed.

Interest rates should be kept on hold by the Reserve Bank of Australia in order to ensure that Australian property remains affordable.

This is according to Real Estate Institute of Australia president David Airey, who said that the price of property in Sydney in particular is already creeping towards being unaffordable.

The proportion of income required to meet property loan repayments increased by 5.8 per cent to 34.8 per cent in the twelve months up to September 2010.

"With the most dramatic decrease in housing affordability in ten years …there is no question that the Reserve Bank needs to leave rates on hold next week and for the foreseeable future," said Mr Airey.

His comments follow the publication of the Demographia International Housing Affordability Survey.

This ranked Hong Kong as the least affordable major market followed by Sydney.

Australia had 27 severely unaffordable markets altogether, followed by the UK with 21 and the US with 15.

Posted by Ravin Chatlani

- rate, interest, affordability, property, prices

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