Interest Rates Stay on Hold
Despite many predictions of a rate cut, the Reserve Bank of Australia (RBA) resisted the urge to make a second cut for 2015 and left the cash rate at 2.25 per cent at its April meeting.
Loan Market Chairman Sam White predicted that the rate hold would not slow down activity in real estate market.
"We expect more buyers to enter the property market, not necessarily because of the interest savings but because of a belief that interest rates aren't going to rise anytime soon. It's the directional sign that will spur buyers."
One of the biggest challenges over the next year will be the impact lower interest rates have on housing.
"Reduced interest rates put more pressure on house prices, which is challenging in the long term. We would like to see the growth start to moderate as would many market participants," Mr White said.
Mr White backs specific measures to better control house prices: "We firmly believe that a better way to introduce price sustainability is to increase supply and reduce the amount of direct and indirect taxes that a buyer pays when they purchase a new home - taxes that can amount to 50 per cent of the cost of that property."
Mr White suggested buyers could take advantage of interest rates while they are at such a reduced rate.
"Lower interest rates simply mean you're paying less to borrow the banks money - when rates are lower you can pay more than the minimum put a serious dent in the balance of your loan."