RBA needs to cut rates more than once: REIWA
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REIWA says the Perth housing market needs more than one rate cut. (ABC: Graeme Powell, file photo)
The Real Estate Institute of Western Australia (REIWA) says a cut in official interest rates today will not be enough to revive Perth's flagging property market.
Many economists are predicting the Reserve Bank of Australia (RBA) will lower the cash rate from 7.25 to 7 per cent today, even though inflation remains above the board's target range of 2 to 3 per cent.
Analysts are predicting another cut within the next 18 months, but Rob Druitt from REIWA says a cut of half of one per cent is necessary to stop property prices, which have fallen up to 4 per cent in the past year, from falling further.
"We'll probably need a further rate cut at least half a per cent between now and Christmas to get the market moving again in a forward direction," he said.
"We've certainly had corrections [in property prices] throughout 2008."
The Treasurer, Wayne Swan says any rate cut would mean significant savings for people with a mortgage.
"What I can do is welcome this decision because it would be the first rate cut from the Reserve Bank in over seven years and of course for a mortgage of something like 300 thousand dollars a year it will mean about 50 dollars a month," he said.
"I think that will be certainly welcome by all of those out there suffering from sky high global oil prices and the effects of the credit crunch."
