Home owners are feeling a little more relieved as just four weeks away from Christmas, the Reserve Bank of Australia (RBA) again cuts interest rates. Yesterday, the RBA cut rates by 100 basis points, down to 4.25 per cent.
Several banks have already passed on either all of the rate cut, or part of the rate cut to home owners, cutting standard variable home loan rates by between 0.80 per cent and 1 per cent. So far, none of the non-bank lenders have made any announcements or rate cuts. During the previous rate cuts, non-bank lenders matched the big banks by also cutting home loan interest rates.
Mortgage Choice spokeswoman Kristy Sheppard has welcomed the cuts, saying that the combination of lower rates and the boost to the first home buyer grant will help more Australians to purchase their own property. The Housing Industry Association (HIA) backs up the sentiment, and is hopeful of a housing market recovery.
"Rate cuts are providing mortgage relief to existing home owners, but importantly helping more first home buyers purchase a home of their own," HIA policy chief executive Chris Lamont said. "Rate cuts, combined with the first home owners grant, are making home ownership a reality for a cohort who had all but given up."
Many in the market believe more rate cuts are on the way in the new year, and that the housing market in Australia should start to look up by mid-2009.
Home owners now wait to see if all the lenders, banks and non-banks pass on the latest rate cuts.
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