Login
iscover
Industry leaders have warned that the Reserve Bank’s decision to lower the official cash rate will have serious ramifications for the housing market.
The chairman of mortgage broker Loan Market, Sam White, said the rate cut could accelerate the introduction of stronger macro-prudential measures in a bid to slow the Sydney property market.
“Today’s rate cut is a good sign for Australian business and for the Aussie dollar and our exporters becoming more competitive, but we can’t ignore its impact on the property markets – particularly Sydney,” Mr White said.
The Loan Market chairman suggested discussion on limiting activity in the Sydney housing market could ramp up among regulating bodies.
“If the Sydney market keeps moving, the issue of affordability must be addressed,” Mr White said. “The regulators will be eager to find measures to slow things down.
“Talks around limits on negative gearing, self-managed super fund investment and foreign investment could all be on the table.”
Having seen significant growth in Sydney since the RBA’s last cut in February, Mr White believes today’s decision will further increase energy in the Sydney real estate market.
“It’s in no one's best interests for the market to become unaffordable or unsustainable,” he said.
“If we see another spike in activity, it will force regulators to make tough decisions around measures to slow it down.
“My desire is to see a stable property market that offers long-term value and gives confidence to home owners and investors.”
Meanwhile, Laing+Simmons general manager Leanne Pilkington said Australian real estate “in no way needed another interest rate cut today” as the market is already “red-hot”.
“The RBA would have been wise not to pour further fuel on Sydney’s property fire,” Ms Pilkington said.
She noted that the state of the market, especially in Sydney, is resulting in suburban records regularly tumbling and vendors enjoying windfalls.
Ms Pilkington said rock-bottom interest rates are continuing to play into the hands of investors.
“Investors have been the real winners in recent times as first home buyers fail to experience any respite,” she said.
“Governments around the country must come up with new policy initiatives to improve the prospects of those genuine first home buyers committed but unable to break into the market.”
Ms Pilkington warned that without intervention more Australians will abandon the dream of home ownership.
You are not authorised to post comments.
Comments will undergo moderation before they get published.