The Reserve Bank of Australia has cut the official cash rate by 0.25 percentage points to a record low of 0.5 per cent.
The cut - the fourth in less than 12 months - follows turmoil in financial markets over the past week driven by fears about the impact of the global coronavirus outbreak.
"The board took this decision to support the economy as it responds to the global coronavirus outbreak."
"The coronavirus outbreak overseas is having a significant effect on the Australian economy at present, particularly in the education and travel sectors."
The central bank has already forecast the virus will wipe 0.2 of a per centage point off Australia's economic growth in the first quarter, but now says it thinks that hit to the economy will be more substantial.
The board did acknowledge the rapid growth in property prices and borrowing.
"There are further signs of a pick-up in established housing markets, with prices rising in most markets, in some cases quite strongly."
To find out more about how the rate drop will affect you, call your local property partner who can put you in contact with a trusted mortgage broker.