Home loan holders 'hit hard by RBA decision'

People with home loans are going to be disappointed by the Reserve Bank of Australia's (RBA's) recent decision on interest rates.

This is according to Tim McKibbin, chief executive officer (CEO) of the Real Estate Institute of New South Wales, who admitted he was surprised by the RBA's actions.

The central bank opted to keep interest rates on hold this month, meaning they remain at an all-time low of three per cent.

The RBA made four cuts in 2012, with drops of 25 basis points in June, October and December, while a 50 basis points reduction occured in May.

Mr McKibbin claimed a further drop in the key cash rate was sorely needed, particularly as the board members had not made a decision since December.

"This decision shows that the RBA is out of touch with the needs of mortgage holders and the economy generally," he explained.

"Housing is the lifeblood of the economy and having not met for two months it was critical that the RBA showed clear leadership and responsibility."

However, research director at RP Data Tim Lawless this month said further calls for a cut to interest rates may be dampened by recent positive statistics in the sector.