Strong economy prompts Australian base rate rise

Australia's central bank has raised its main interest rate in recognition of the country's economic recovery, of which the housing market revival has been one element.

Reserve Bank of Australia governor Glenn Stevens explained that the rise in the cash rate from three per cent to 3.25 per cent was due to a range of indicators suggesting that the economy is set to enjoy "close to trend" growth in 2010.

This move will help "ensure" the sustainability of expansion in the economy, Mr Stevens added.

Positive indicators also include lower than expected unemployment, private sector investment growth and the fact that the nations with the best performing economies in the world are Australia's main trading partners in Asia.

Those keen to buy in Australia may enjoy the fruits of this development impacting on their property.

Despite the rate rise, they will also be able to enjoy historically low interest levels, with the cash rate having been at 7.25 per cent as recently as August 2008.

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