The Reserve Bank of Australia has imposed the much needed cash rate cut of 25 basis points to 4.5 percent that will help improve the Australian economy in the coming months.

After almost two years of maintaining benchmark cash rates in Australia at 4.75 percent, the RBA deemed it necessary to pare it down to encourage consumers to spend more and boost current business conditions currently at laggards for more than a year.

The easing of inflation rates and the moderate improvement in Australia's unemployment were some of the factors seen by the board of governors of the RBA in finally reducing the benchmark rates.

"Over the past year, the Board has maintained a mildly restrictive stance of monetary policy, in view of its concerns about inflation. With overall growth moderate, inflation now likely to be close to target and confidence subdued outside the resources sector, the Board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth and 2-3 per cent inflation over time," said the RBA in a released statement.

The country's services and mortgage and property industries will significantly benefit with the said monetary policy decision.

Mortgage Choice spokesperson Kristy Sheppard told the ibtimes.com.au the rate cuts would encourage more borrowers to shed off their current mode of conservatism.

The Real Estate Institute of Australia's (REIA) Acting President, s Pamela Bennett, also welcomed the Reserve Bank of Australia's (RBA) decision to decrease official interest rates.

Brian White, chairman of the Ray White Group with 1000 real estate offices, said the winners in the Reserve Bank of Australia decision are buyers and sellers in the market.

"We have now been discussing a possible rate increase for nearly two years as a nation. It has clearly been inhibiting the psyche of some potential buyers and sellers who have lacked the economic confidence to make decisions about property transactions in that period," Ray White Group chairman, Brian White said in an emailed statement.

"There are many people on the sideline who have been awaiting a more favourable cash rate before engaging in the market and this, in turn, has been impacting other sectors of our economy."

"It's encouraging for the RBA to recognise that people need to feel secure in their property equity in order to spend elsewhere. When an individual buys a home they are effectively embarking on a long journey with the RBA."