Interest rates should now stay on hold for some time after the latest increase by the Reserve Bank of Australia (RBA) on Tuesday, a mortgage broker says.

The RBA raised the cash rate by 25 basis point to 3.5 per cent following Tuesday’s board meeting, following a similar increase last month.

Loan Market Group executive chairman Sam White said the RBA has responded to Australia’s strong economic performance.

“By getting in early they are solving any possible inflation pressures,” Mr White said in a statement.

“It means we’re going to have fewer rate rises in the future and this rise hopefully should be the last for some time to come.”

Real estate agent PRDnationwide said while another rate rise will be tough on those homeowners battling mortgage stress, it could be a boon for property investors.

PRDnationwide managing director Jim Midgley said the latest rate rise would boost investor confidence that had retreated during the economic downturn.

“Property investors who have been waiting for the first home buyer activity to drop are now looking to pounce since interest rates started to go up,” he said in a statement.

He said investor activity was up across the board and the small interest rate rise would have minimal impact on house prices.

“The real estate market has come through the downturn quite well because of an under supply of real estate in Australia,” he said.

He also thought it would be the last rate rise this year.

Real estate agent Ray White said the market coped very well with last month’s rate rise and he expected the same this time around.

“While Shocking got home in the big race today, there was no shock for home buyers with a 0.25 per cent interest rate rise from the RBA,” Ray White chairman Brian White said in a statement.

“We have lived for decades with rates far higher than they are at the moment. The move by the RBA will ensure property prices won’t outstrip inflation and it will help create a balanced property market.”

However, real estate agent Raine & Horne CEO Angus Raine is concerned for the many first time home buyers who have taken advantage of the government’s more generous housing grant in the past year.

“I urge the (RBA) board to keep these people in mind when deliberating on interest rates in the future,” Mr Raine said in a statement.

AAP