Rate rise blow for affordability

Housing affordability has taken another hit following the Reserve Bank of Australia's (RBA) decision today to increase the cash rate by 25 basis points to 6.5 per cent.

Real Estate Institute of Queensland (REIQ) managing director Dan Molloy said it was disappointing the RBA did not wait for the impacts of the recent correction in the Australian share market to be fully realised before lifting rates.

"This interest rate rise also appears unnecessary given the underlying annual inflation rate is still within the RBA's target range of 2 to 3 per cent," Mr Molloy said.

"With the policy focus of governments across the country currently being very much about housing affordability, this rise will be another blow to homeowners already struggling to make ends meet.

"It will also lock out those aspiring first home buyers already battling to get a foothold in the property market by putting further upward pressure on rents."

This rate rise makes an even stronger case for governments to provide relief through the first home owners grant and stamp duty concessions, Mr Molloy said.

"The REIQ continues to urge all tiers of government not to take their eye off the ball of housing affordability and looks forward to further announcements from the State Government following the recent release of its Housing Affordability Strategy."

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