Media release - 5 June, 2012

Rate cut welcomed by Raine & Horne CEO

Angus Raine, CEO of Raine & Horne says he is pleased the Reserve Bank of Australia has taken the decision to cut the official cash rate by 25 basis points, to 3.5%.

“I was anticipating a 0.5% cut, however until we know more about the fallout from the European debt crisis, a 25 basis point cut now, with another 25 points in July, is probably the most sensible course of action,” says Angus Raine, CEO, Raine & Horne.

“The move by the RBA to cut the official cash rate to 3.5% will provide much needed respite for owner-occupiers as lower interest rates will also help offset the impact of rising energy costs as we face the prospects of a very cold winter,” adds Mr Raine.

“Likewise, with share markets around the world down by between 10% and 20% from their 2012 peaks, lower interest rates will help encourage more investors to take the plunge into a real estate asset, especially with vacancy rates across Australia near all-time lows.”

Mr Raine added that lower interest rates were also set to push the value of the Australian dollar down further, which would prove a shot in the arm for traditional holiday markets along Australia’s east coast.

“Lower interest rates are great news for those holiday markets that have felt the pinch of an Australian dollar that has consistently punched above parity against the greenback since October 2010,” says Mr Raine.

“As a result, popular holiday destinations such as Cairns and the Sunshine and Gold Coasts in Queensland, as well as the southern, central and north coasts of NSW, should enjoy lower vacancy rates for the remainder of 2012.”

Paul Newell, Executive Director, Sales at Raine & Horne’s financial services division, Your Broker, is urging lenders to pass on the rate cut in full to alleviate mortgage stress.

“The lenders must pass on the rate cuts in full as economies around the country need stimulating,” says Mr Newell.

“We’ve now had a number of rate cuts since November where the lenders have failed to pass on the full extent of the RBA’s rate cuts.

“Now is the time for the lenders to do their bit to stimulate retail sales and the real estate markets.”

Mr Newell advises that should a lender fail to pass on the entire rate cut, then borrowers should consider taking their mortgage business elsewhere.

“Consumers should shop around as some lenders will pass on a bigger slice of the cut than others,” he added.

-ENDS-

For further media information contact:

Angus Raine, CEO Raine & Horne on (02) 9258 5422 or 0409 920 697

Paul Newell, Executive Director, Custom Equity Group on 07 5580 8611 or 0439 760 768

Andrew Harrington, National Marketing & Communications Co-ordinator on 02 9258 5400

Interest rate cut will provide homeowners and tourism industry with much needed respite, says Raine & Horne