In what could be the biggest turning point in the year for construction, the Reserve Bank of Australia (RBA) has dropped interest rates for the first time since 2020.

The RBA has announced a 0.25 percentage points reduction. The cash rate is now 4.1 per cent after more than a year of rates at 4.35 per cent.

All 4 major banks have indicated they will pass on the reduction. 

Speaking before the RBA interest rates announcement Brighton Homes CEO Brad Collins said a rate cut would bring some confidence back to the customer base. costs are headed. 

“We know there is some demand out there and people are waiting for rates to drop so they build the home they want,”

“They don’t want to build what they can afford now, they want the home they could afford before rates went up, so they are sitting on their hands.

 “From a mortgage payment perspective, we know the repayments on a typical Brisbane house of $890,000 a 0.25 point rate cut would save $120 a month on repayments. This combined with inflation falling into the RBA’s 2 to 3 percent band would create some opportunity for new home buyers. 

 “The real movement will come after the second cut.”

Metricon CEO Brad Duggan said the uncertainty over interest had many potential buyers hesitant to commit.

“They’ve lacked the confidence to take the next step and pay a deposit,” Mr Duggan said.

“Buyers want to build—our high engagement proves that—but financial hesitation is holding them back.”