The Real Estate Institute of Queensland (REIQ) managing director Dan Molloy said the increase – which takes the cash rate to its highest level since July 1996 – was a bid by the Reserve Bank to take some heat out of an economy affected by skills shortages, the inflationary impact of election commitments, and continued high consumer spending driven by the strong Australian dollar.
"All of these factors, as well as the underlying inflation rate being at the top of the Reserve’s 2 to 3 per cent target range, has prompted the Reserve Bank to increase interest rates," he said.
"The current strong economic conditions, and today’s rate rise, are little comfort to aspiring first home buyers who continue to struggle to move out of the rental market and into their own home."
Mr Molloy said the historic decision by the Reserve Bank to raise interest rates during an election campaign was not only a sign of its independence but that it is in a monetary tightening mode.
"The Reserve Bank has clearly not been over-awed by the election," he said.
"The Opposition’s first home buyer saver account initiative is a step in the right direction towards addressing declining housing affordability however further innovative policies are still needed.
"In the final weeks of the election campaign, the REIQ looks forward to hearing more details from both sides of politics on how this housing affordability crisis can be addressed.
"Not withstanding the focus of the federal election, the REIQ believes it is the responsibility of governments at all levels to address the structural issues influencing supply and demand in the sector of the market targeted by first home buyers."