Reduced interest rates causing behavioural shifts in the property market On 3 November 2020, the Reserve Bank of Australia (RBA) announced additional measures to safeguard the economy from the impacts of COVID-19 – including a new record low cash rate of 0.1 per cent1. RBA Governor Philip Lowe said these measures will help quicken the pace of economic recovery, and that they are “prepared to do more if necessary”2. The RBA has deployed contingency conditions throughout 2020. The initial cut to the cash rate, 0.25 per cent3, came in March of this year and was at the time a record low. In response to this, lenders across the country have been passing on reductions to their customers by lowering their interest rates, benefiting consumers. 6
According to the Australian Bureau of Statistics report in September4, these unprecedented market conditions have spurred dormant homebuyers into action, with a 5.9% increase in new loan commitments for housing and 8.5% for personal fixed term loans reported, respectively.
