{"id":4798,"date":"2025-05-20T18:38:24","date_gmt":"2025-05-20T08:38:24","guid":{"rendered":"https:\/\/theonsitemanager.com.au\/news\/?p=4798"},"modified":"2025-05-20T18:38:26","modified_gmt":"2025-05-20T08:38:26","slug":"reiq-welcomes-rate-relief-amid-heightening-housing-pressure","status":"publish","type":"post","link":"https:\/\/theonsitemanager.com.au\/news\/reiq-welcomes-rate-relief-amid-heightening-housing-pressure\/","title":{"rendered":"REIQ welcomes rate relief amid heightening housing pressure"},"content":{"rendered":"\n

The Real Estate Institute of Queensland (REIQ) is welcoming the Reserve Bank of Australia\u2019s (RBA) latest move to resume monetary easing, cutting the official cash rate by 25 basis points to 3.85 per cent \u2013 marking a return to the level last seen in May 2023.<\/p>\n\n\n\n

REIQ CEO Antonia Mercorella said the rate cut would provide welcome relief for borrowers and much-needed stimulus for new housing supply.<\/p>\n\n\n\n

\u201cThis cash rate cut is particularly critical for Queensland, where we\u2019re experiencing above-average population growth <\/sup>and a pressing need for new housing construction,\u201d Ms Mercorella said.<\/p>\n\n\n\n

\u201cWith the Brisbane 2032 Olympic Games on the horizon, stimulating housing supply and infrastructure investment has never been more vital to ensuring the state is well-prepared to meet future needs \u2013 especially when the spotlight turns to Brisbane.\u201d<\/p>\n\n\n\n

Ms Mercorella said the cumulative impact of two 25 basis point rate cuts this year \u2013 today\u2019s cut combined with February\u2019s cut \u2013 would make a meaningful difference to borrowing capacity and mortgage savings.<\/p>\n\n\n\n

\u201cAn additional rate cut is a welcome reprieve for homeowners, buyers, and investors,\u201d she said.<\/p>\n\n\n\n

\u201cIt provides breathing space for mortgage holders and encourages more Queenslanders to enter the property market.<\/p>\n\n\n\n

\u201cA variable mortgage holder with the average new owner-occupier loan in Queensland ($647,000) could see monthly savings of around $196 if the two cumulative 25 basis point rate cuts are fully passed on.<\/p>\n\n\n\n

\u201cTwo rate cuts will also provide a boost to purchasing power \u2013 a single buyer on an average income could now afford around $20,000 more, while a dual-income household with two children could see an increase of approximately $30,000.*<\/p>\n\n\n\n

\u201cHome buyers, in particular first home buyers, should be encouraged by the effects of reducing the cash rate, despite first home buyer activity being below long-term averages.<\/p>\n\n\n\n

\u201cThere were 17,513 new owner-occupier loans in Queensland during the March 2025 quarter \u2013 well below the historical average of 18,665.

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\u201cInvestor sentiment, previously dampened by high borrowing costs, is also expected to be further bolstered by this second cash rate cut and the prospect of more to come.\u201d<\/p>\n\n\n\n

Ms Mercorella said the broader economic conditions supported the RBA\u2019s decision, amid moderating inflation and relatively weak business conditions and confidence. <\/p>\n\n\n\n

\u201cNationally, CPI inflation was 2.4% in the March 2025 quarter in annual terms, unchanged from the December 2024 quarter, while annual trimmed mean \u2018core\u2019 inflation came in at 2.9% in annual terms \u2013 both comfortably within the RBA\u2019s 2-3% target band,\u201d she said.<\/p>\n\n\n\n

\u201cFurther, quarterly GDP growth through to December 2024 was below average at 0.6%, with GDP per capita down 0.7% year-on-year.<\/p>\n\n\n\n

\u201cWhile consumer sentiment rose by 2.2% in May 2025, this increase only partially offset the 6.0% drop in April, which followed the announcement of US tariffs and resulting financial market volatility. <\/p>\n\n\n\n

\u201cIn the context of the global economic uncertainty, stemming largely from the US-China trade war, which could affect the stability of the Australian economy, a rate cut is a timely measure to help restore confidence.\u201d<\/p>\n\n\n\n

Ms Mercorella said that while the second rate cut brings more relief, it must be complemented by longer-term housing policy action, particularly on the supply side.<\/p>\n\n\n\n

\u201cUnless all levels of government take urgent action to boost new housing stock, any affordability gains from lower rates will be undermined by persistent undersupply,\u201d she said.<\/p>\n\n\n\n

\u201cConcerningly, loan commitments to owner occupiers for the construction of new dwellings in Queensland remain low \u2013 1,914 in the March 2025 quarter, compared to the historical average of 2,159 new loans.\u201d<\/p>\n\n\n\n

The REIQ\u2019s analysis of ABS building approval data highlights significant shortfalls in the pipeline of new housing supply:<\/p>\n\n\n\n