The Reserve Bank of Australia this week cut the official interest rate to an historic low of 1.75 per cent, based on weak inflation numbers released last week.

The drop will save a typical homeowner $72 a month on a $500,000 loan.

And while the news will only bring pain to self-funded retirees, anyone looking to buy a home will be thrilled. 

Raine and Horne director Matt Clifton said, generally speaking, the Reserve Bank felt more stimulus was needed in the property market.

“They felt the market was slowing in the capital cities, even though there was still good demand for properties,” Mr Clifton explained.

He said the rate cut will further increase the affordability for people purchasing homes. 

“That’s good news for sellers and buyers,” Mr Clifton said.

“It will potentially put more buyers in the marketplace.”

Mr Clifton said both first home buyers and investors would benefit from the rate cut – providing banks pass it on to their customers.

“From an investor’s point of view the return on their investment will be better than ever before,” Mr Clifton said.

Mr Clifton said regardless of what is happening in the metropolitan areas, he doesn’t believe the market in Bathurst has stalled. 

“In the capital cities there still appears to be strong demand, but there is a shortage of stock,” he said. 

“The boom prices of the past 18 months have levelled out. Here we didn’t get that impact of rising prices. 

“The market has been pretty firm to edging upward.

“There is still a shortage of stock here, this rate cut might encourage more people to sell.”

LJ Hooker director Zac Theobald said if anyone is going to benefit from this week’s interest rate cut it is going to be first home buyers.

“It’s the lowest I have ever seen it,” he said.

“It’s helping everyone in the market. Those selling will get the best prices because there are more buyers out there looking.”

Mr Theobald said the year started off quietly, but things have absolutely picked up.

“The low interest rates are making it easier, but they are not going to stay low forever,” he said.

“Eventually they are going to pick up, so I hope people don’t overcommit themselves.”