The Reserve Bank of Australia (RBA) should continue to cut the official cash rate til it hits two per cent, one mortgage industry stakeholder has claimed.
Speaking to Real Estate Business‘ sister title, The Adviser, LJ Hooker Financial Services head of finance Peter Bromley said while it was good to see the Reserve Bank cut 50 basis points from the official cash rate last week, the Board could stand to cut a lot more.
“By comparison to other developed countries, Australia’s cash rate is incredibly high,” he said.
“The other day, a financial commentator said the official cash rate should be cut to two per cent and I tend to agree. I know real estate agents, brokers and borrowers would all be very happy to see the cash rate sitting at two per cent.
“Not only would it generate a lot more activity in the housing industry, which badly needs stimulus, but it would also improve overall confidence – which is something we so desperately need to do.”
Mr Bromley said while the Reserve Bank may not cut rates to two per cent, he said it is very likely that they will at least trim a further 25 basis points from the cash rate at the June Board meeting.