The Reserve Bank of Australia's decision to leave interest rates unchanged disappointed the Real Estate Institute of Australia (REIA). The REIA president said a rate cut was warranted given low inflation and would have encouraged more first home buyers by making mortgage repayments more affordable and stimulating the lower end of the property market. While a small improvement in housing affordability was seen, the REIA wants to see greater changes over consecutive quarters and believes lower rates are needed to reduce the proportion of income Australians spend on loan repayments.

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Media release
Tuesday 7 February 2011
Rate cut would have encouraged home buyers
The Reserve Bank's decision to leave rates unchanged is very disappointing news for home buyers,
according to the Real Estate Institute of Australia (REIA).
“The latest Consumer Price Index (CPI) figures are well within the Reserve Bank of Australia's (RBA) target zone
of 2-3 per cent and should have provided a clear indicator to cut rates. The RBA's Governor has even indicated
that he expects inflation to fall further in the next quarter or two" said REIA president, Ms Pamela Bennett.
"A further cut would have assisted those who are currently paying off a mortgage and would have been the
encouragement needed for first home buyers," she said.
The REIA's Deposit Power Housing Affordability Report for the September quarter showed a very small
improvement in housing affordability but REIA would like to see a greater change over consecutive
quarters.
"We know that first home buyers are starting to return to the property market but another reduction would
have assisted in stimulating the lower end of the market and provided a ripple effect to those buyers trading
up ," said Ms Bennett.
“Although just one component of the solution, lower interest rates are needed to reduce the proportion of
income that Australians are spending on loan repayments in an effort to improve housing affordability,” Ms
Bennett concluded.
The Real Estate Institute of Australia (REIA) is the national professional association for real estate
agents in Australia. For further information or interview opportunities, please contact:
Pamela Bennett REIA President 0412 212 313
Amanda Lynch REIA CEO 0419 123 862
Rhiannon McClelland REIA Manager Communications 0421 422 919