According to The Australian Financial Review, the record rate cut has given a further boost to the already rebounding residential market while delivering an even quicker bounce for listed property stocks, which leapt 2.7 per cent higher on Tuesday, well ahead of the broader equities market.
But the much anticipated cut, coupled with a $100 billion bond-buying program that should give lenders more confidence to pass the official cut on in full to borrowers, could also be paving the first steps towards a housing bubble, some analysts warned.
"What the RBA's intention is, is that they would like to see a recovering housing market and I think they are going to get it," SQM Research's Louis Christopher said.
"Yes, it does risk creating too much fuel for the housing market.
"We are at a significant risk of a new housing bubble. The economy is in recession, or coming out of one. There is going to be a cost here. Eventually we are going to see unaffordable housing."
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