Although the real estate market has shown some improvement in recent months affordability is still very much an issue, with buyers struggling to obtain home loans. The stable interest rate has done much to ease the fears of banks; leaving them more willing to relax strict bond application requirements. Even a marginal increase of 0.5% in terms of the interest rate would have had a negative impact on growth in this sector.
Swain believes that in a time of financial uncertainty people need to be encouraged to invest their savings wisely in, for example, property which tends to appreciate over time. Leaving the repo rate unchanged will aid buyers both in terms of affordability and mortgage approvals.
