Base rate rise 'will stabilise Australian property market'

Australia's property market will benefit in the longer run from the recent interest rate rise, it has been claimed.

Brian White, the chairman of real estate firm Ray White, said the decision of the Reserve Bank of Australia (RBA) to hiked the Cash Rate from three per cent to 3.25 per cent will help to stabilise the sector.

He remarked: "There's nothing worse than a market getting out of control and the residential market has been remarkably strong over the last four or five months."

A stable situation may help the Australian real estate market to grow gradually without a boom-and-bust scenario arising, something that could encourage those keen to invest in the country.

In the minutes of this month's board meeting released yesterday, the RBA said it had raised the interest rate partly because a "sizeable gap" has emerged between its relatively strong performance and the weaker ones of other developed countries.

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