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REIA: Lending is crucial to Australian property growth

REIA says the high standard of bank lending and low interest rates are good for the property market.

The Real Estate Institute of Australia (REIA) has said that strong lending standards and low interest rates are key to keeping consumer confidence high and help the country's property market grow.

Chief executive officer of REIA Amanda Lynch made this point following on from advice from the Reserve Bank of Australia (RBA) in its September 2013 Financial Stability Review that consumers and banks should be realistic about how much they expect house prices to grow.

Ms Lynch said: "We believe that maintaining the banks’ high lending standards is crucial to ensure continued sustainable growth in the Australian housing market."

House price growth has been aided in part by the RBA's cuts to its benchmark interest rate, making mortgages cheaper and improving housing affordability.

In its policy meeting for September, RBA decided to keep its interest rate on hold at 2.5 per cent for the second month in a row. This decision was widely expected by economists and many believe it will be the last rate cut of the year.

Posted by Ravin Chatlani

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