The Reserve Bank has slashed interest rates to a record low of just 0.5 per cent as it seeks to soften the economic impact from the CVID-19 crisis.
Looking at the last 12 months, interest rates fell three times in 2019 as the RBA tried to kick-start the Australian economy. At the time this put a real fire in inner-city Melbourne property prices to the point where November saw the largest monthly price gain in 16 years. Auction rates moved from under 50%, the weakest since the G.F.C. to a healthy mid-70%’s clearance across town by end 2019.
With the latest cut, analysts at RateCity calculate that the 25-basis-point reductions would save a variable home loan customer with a $500,000 loan $70 per month on their repayments. This is a huge announcement for all buyers and investors in the market.
The Prime Minister has put his full support behind the RBA cut with Scott Morrison announcing his expectation that the big banks to “do the right thing” by consumers and pass on any rate cut in full.