The Reserve Bank of Australia (RBA) has just set the lowest cash rate breaking its all-time record. The RBA announced a 25 basis point cut to 1.25%.
There is a belief that the rate will be lowered by an additional 0.25% in the near future, a most predicting it to be implemented in August.
Some lenders have pre-emptively taken action in anticipation of this decision. Canstar reports there were 531 interest rate moves in May, with 85% (449) of these being cuts to fixed rates.
Interestingly, on June 3, Greater Bank became the first to offer a mortgage at less than 3%.
“Mortgage rates for owner occupiers are already around the lowest level since the 1960s and lenders are generally expected to pass on most, if not all, of the cash rate cut to mortgage interest rates,” said Lawless.
“Overall, [this] should help to support an earlier than expected trough in housing values, but we aren’t expecting a rapid reversal in house price declines due to ongoing tight credit policies and, more broadly, economic uncertainty as global trade tensions escalate,” he concluded.