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RBA Cuts Rates - December 2011

By webmaster 07 December 2011 | 1 minute read

The RBA has cut the official cash rate for the second consecutive month, dropping the rate by 25 basis points to 4.25 per cent.

Last month the Reserve Bank cut the cash rate from 4.75 per cent to 4.5 per cent.

Laing+Simmons Real Estate Agents general manager Leanne Pilkington said the cash rate drop was not a surprise and would help out investors in the market.

“This trend is paramount to buyer confidence and is another factor supporting what is already a buyer’s market,” Ms Pilkington said.

“Prices are stable and vendors are necessarily being more realistic when it comes to price. The emergence of a downward interest rate trend will have further positive bearing on affordability.”


RP Data’s Cameron Kusher said he was not surprised either by the rate cut, particularly given everything that has been happening in the housing market.

“The rate cut should not come as a surprise from a housing market perspective, considering the soft market conditions that first became evident in June of last year have created no inflationary pressures and have persisted,” he said.

“In fact, capital city home values are down four per cent from their December 2010 peak and rental rates have increased by just 4.6 per cent over the 12 months to September.

“The successive improvements to debt servicing positions borne through the two interest rate cuts over the last two months will be a welcome improvement to anyone with a mortgage.

“The primary benefit from the rate cut is likely to be seen in a continued improvement in consumer sentiment which should lead to an uplift in housing transaction volumes which are currently tracking about 10 per cent below the five year average nationally.”

The RBA Board now breaks for a month, with the next Board meeting scheduled for February.



Rates refer to a fixed price or an amount charged by sellers or providers for their goods and services.

RBA Cuts Rates - December 2011
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