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23/11/2009 07:31 Sydney, Australia.
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Given high house prices and rising interest rates, many young people struggle to buy a home.
Homeowners in NSW and Queensland are spending more than 40 percent of their income to meet mortgage repayments as housing affordability hits record lows.
As predicted, the Reserve Bank has cut interest rates by 0.25 percent, kicking off what is expected to be a prolonged period of rate cuts.
Join Nine Network finance editor Ross Greenwood as he analyses today's Reserve Bank of Australia rate cut.
The Reserve Bank has cut interest rates by 25 basis points as expected, but housing affordability remains at record highs.
A half-percent cut in interest rates will take 65,000 households out of mortgage stress, according to research.
Economists believe a 25 basis-point cut by the Reserve Bank of Australia (RBA) is guaranteed next month, while the prospect of a 50 basis-point cut is becoming more likely as data suggests the economy is slowing quickly.
With many properties going to auction, particularly in Melbourne, many first-time buyers have no alternative but to line up to buy under the hammer.
See Effie at the Home Buyer Show
In recent days the major commercial banks have refused to confirm that they will pass any official cuts in interest rates by the Reserve Bank.
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