Rate cut could increase measures to slow down Sydney property market
Chairman of Loan Market, Sam White, says the RBA's decision to cut the official cash rate to 2 per cent could accelerate the introduction of stronger macroprudential measures in a bid to slow down the Sydney property market.
"Today's rate cut is a good sign for Australian business and for the Aussie dollar and our exporters becoming more competitive, however, we can't ignore its impact on the property markets - particularly Sydney," he said.
Mr White suggested that discussion around limiting activity in the Sydney housing market could ramp up among regulating bodies.
"If the Sydney market keeps moving, the issue of affordability must be addressed. I think the regulators will be eager to find measures to slow things down.
"Talks around limits on negative gearing, self managed super fund investment and foreign investment could all be on the table," he said.
Having seen significant growth in Sydney since the RBA's last cut in February, Mr White believes today's decision will further increase energy in the Sydney real estate market.
"It's in no-ones best interests for the market to become unaffordable or unsustainable. If we see another spike in activity, it will force regulators to make tough decisions around measures to slow it down.
"My desire is to see a stable property market, which offers long-term value and gives confidence to homeowners and investors," Mr White said.