RBA 'should cut rates further to boost property sector'

The Reserve Bank of Australia (RBA) needs to introduce more interest rate cuts in the coming months in order to stimulate the country's property market, it has been claimed.

Speaking to Property Observer, investment adviser Monique Sasson Wakelin asserted that the latest cut was not sufficient to significantly impact on the market.

She observed that since April 2009, the country has had to cope with interest rate increases totalling 1.75 per cent and claimed another cut would help to improve confidence in the economy.

The expert forecast that there will be another rate cut before February next year, adding that there is likely to be some capital growth seen in the middle of 2012.

If there is another rate cut within the next three months, Ms Wakelin said the market is "going to kick because a half a per cent has a much greater financial impact on people’s financial affairs and commitments than a quarter per cent does".

Before the announcement this month that the official cash rate would be cut by 25 basis points, the last reduction was in April 2009 when it was cut from 3.25 per cent to three per cent.

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