On Tuesday 3 March, The Reserve Bank Of Australia decided to lower the official cash rate by 25 basis points to 0.50 per cent.  This has been a direct action to support the economy during the global spread of the coronavirus. 

Governor of the RBA Philip Lowe commented that the coronavirus has created uncertainty in the global market and several countries including China have created policy measures to support growth.

He said it was appropriate to ease monetary policy to provide support for employment and economic activity. Once the Coronavirus is contained, the Australian economy is expected to return to an improving trend.

The Commonwealth Bank, Westpac and a number of smaller lenders have announced they would pass on the full 25 basis point cut to its home loan customers.

Terry Portelli, Managing Director of leading residential sales and marketing agency Red23 welcomed RBA’s announcement, saying, “ It is critical to provide a proactive response to support not only the recovering property market but important sectors such as education and travel.

We have seen a solid start to the year in the new homes market, in both sales and enquiry across all regions.  We will be keeping a keen eye on wage growth and if it can improve from its current soft position, consumer confidence in terms of spending and unemployment rates.  These will be underlying factors in terms of housing affordability in 2020.  

Similar to many commentators, we believe there is a strong chance of a further rate reduction in the coming months if the Coronavirus continues,” he concluded.