Colliers International residential research director Jonathan Rivera said it was a very significant reduction.
"It's the largest decrease we've seen in the cash rate since 1994 which is going to be a welcome relief for property investors," said Mr Rivera.
"I really do believe this is the RBA trying to force the banks to pass on the savings and reduce their standard variable home loan rate.
"It's a welcome relief for those under mortgage stress as well as those looking to enter the property market considering home loan affordability has been deteriorating considerably over 2008," said Mr Rivera.
Colliers International residential managing director Grant Dearlove agreed.
"This is an injection that the residential property market has needed," said Mr Dearlove.
"We've waited all year for the Reserve Bank to relax interest rates to ignite the market," said Mr Dearlove.
"The question is – is it an injection of adrenalin or panadol?
Mr Dearlove said he was relieved the Reserve Bank had finally heard the market's call for help.
"We will have to see further rate decreases before the market is stimulated to the point it was in 2007," said Mr Dearlove.
"History is a good guide – after the 1987 stock market crash, investors flocked back to bricks and mortar, to avoid the volatility of the equity markets. With interest rates now dropping significantly, and volatility being assured for the next 3-4 months, we will see stimulus in the residential property sector.
"However, what is different now to 1987 is the lack of liquidity. Banks have changed their views on lending risk, and it is more difficult to secure funding to buy a residential house in the absence of a large deposit and a healthy and stable financial position," said Mr Dearlove.
"Today's movement in the cash rate will improve the situation, but it's going to be at least 12 months before we see the market really heat up. And the only way that will happen is if interest rates drop further.
Mr Rivera said today's announcement could mean a turnaround in sentiment in the property market.
"It means property prices will have the chance of staying a lot more stable if the banks can pass on the savings to buyers," said Mr Rivera.
"If CPI does show signs of returning to of the RBA's target range 2-3 % in 2009, then it is quite possible we will see interest rates go further down or stabilise," said Mr Rivera.
Mr Rivera said today's announcement would benefit those living in the 'mortgage belt' most.
"It will help those in the outer suburbs on lower to middle incomes," he said.
"On a $300,000 loan it's a saving of $200 to $250 a month," he said.