Mortgage borrowers are expected to benefit from a series of interest rate cuts following a dramatic revising downwards of economic growth forecasts by the Australian central bank.
At the start of the month the Reserve Bank of Australia slashed their cash rates to the lowest level seen since the height of the global financial crisis.
Some economists are predicting that there could be as many as three further cuts, with the first taking place as early as June, and the cash rate expected to be slashed by a further 75 basis points which would take them to 3 per cent by December.
The quarterly state released by the RBA warned the job market and property industry were weakening. The property market is in the depths of the worst market conditions for decades, and is hoping the 50 basis point cut at the start of the month would act as a catalyst for a slow but steady recovery.
Greg Troughton, chief executing of the Real Estate Institute of SA says he was pleased all the major lenders decided to cut their interest rates but added it would take time for the effect of these cuts to result in home sales.
“The market has been the toughest it has been for some decades but I think that the interest rate cut might encourage buyers to start signing contracts rather than kicking the tyres,” he said.
The four major lenders cut interest rates from between 32 to 40 basis points.