On Tuesday, the Reserve Bank of Australia (RBA) cut official interest rates to a new record low of 1.25 per cent, as it looks to turn around sluggish employment, wages and inflation.

Most lenders have passed on the full 0.25 per cent cut to variable home loans. A 0.25 percentage point cut on a $400,000 mortgage means a saving of about $60 a month, or $720 a year.

"I think the rate cut is good for the property market and stimulating that," said Jake Mackenzie, Real Estate Institute NSW Illawarra deputy chair.

"There's a lot more confidence around the market now than opposed to pre-election when things started to stall.

"Overall it's going to be a positive thing; if people can get their hands on more money they're going to spend more money on property which drives up prices."

It will mean more people are in the market for a house, he said, potentially making it harder for first homebuyers to secure their favourite property.

Mr Mackenzie said the RBA was expected to make another interest rate cut later in the year.

Illawarra economist Alex Frino said Tuesday's cut had been widely expected but with rates already so low, the stimulus was unlikely to have the same effect to the economy as in the past.

"The objective of the RBA in essentially playing or adjusting the cash rate to stall inflation while keeping the economy going and employment strong," Professor Frino said.

"It will have a marginal effect but the size of the cut is quite small."

Both Professor Frino and Mr Mackenzie agreed retirees or other people who had money tied up in term deposits may see a negative impact from the cuts.

"Anyone with a mortgage will have less interest to pay and therefore more cash in their bank account, so borrowers will have a little bit more money," Professor Frino said.

"The problem is though with interest rates tracking down, anyone who is saving money in the bank or has an interest bearing deposit will be doing less well and have less money."

More than 50 banks have cut term deposit rates in the past two months in the lead up to the RBA's cut, according to RateCity.com.au.

"It's been a tough slog for savers over the last three years, and now rates are likely to sink even further," their research director Sally Tindall said

"It is especially frustrating to see ANZ and Westpac hold back part of a home loan rate cut with one hand and slash some of their deposit rates with the other.

"It does still pay to shop around. Right now, you can find term deposit and savings rates that offer up to around three per cent, however, these rates are unlikely to last for long."

If you are looking to capitalise on the decreased rates, one of the cheapest houses on the Illawarra market is a two-bedroom, one-bathroom abode in Berkeley for $380,000.

The fibro cottage at Flagstaff Road sits on a 569 square metre block and is listed as a "great opportunity for first home buyers" by Elders Real Estate.

If you're looking for something at the other end of the scale you could buy a six-bedroom, three-bathroom home at Carlyle Close in Dapto for $2,950,000.

The "entertainers paradise" listed by Belle boasts a six-car garage, separate gym, salt-water pool and spa, and nestled on 2974 square metres.