Aussie Home Loans' John Symond has urged the RBA to further reduce the cash rate next Tuesday.
Following a rate cut last month to 3.25% and a cut on every Melbourne Cup day since 2006, Symond said market conditions demanded similar action from the Reserve Bank next week.
“Australia continues to be susceptible to economic shocks from overseas and small retailers and businesses are doing it tough as we head into the crucial Christmas retail season," Symond said.
“A rate drop will boost retail sales and the rest of the economy – especially employment - providing much needed confidence to consumers."
Data released by RP Data yesterday showed a sudden reverse in previous capital city dwelling value gains.
With an overall value reduction of 1% across all capital cities, even markets that were supposed to form the vanguard of a revival suffered falls, including Sydney with a -0.9% change.
RP Data research director Tim Lawless said the results highlighted how delicately balanced the housing market is ahead of the RBA decision.
“Whether the October decline is a blip on the path to a recovering market, or a sign of further weakness is yet to be seen," he said.
"Despite the cash rate being only 25 basis points higher than the emergency lows seen in 2009, we are yet to see a real improvement in consumer confidence or housing market transaction volumes.
“Until we see optimists outnumber pessimists in consumer confidence surveys, a recovery in the housing market is likely to remain precarious,” Lawless said.