Opportunities In Property Market Following Cash Rate Decision
The announcement by Reserve Bank of Australia’s (RBA) Governor Glenn Stevens yesterday (November 5) about keeping the cash rate steady for another month could be great for property buyers and vendors alike.
After being lowered to the historically low level of 2.5 per cent at the beginning of August, there was discussion leading up to this week’s Melbourne Cup day decision about whether there would be further cuts to see out the new year.
However, Mr Stevens said in a November 5 statement that the current rate has seen both housing and equity markets strengthen during the last few months, which could indicate a landscape ripe for investment over the next month.
The news of a retained cash rate is good for potential buyers due to the lower interest rates on home loans that come as a result of the reduced rate. Loan Market Director Mark De Martino said the property market has been gaining momentum since the cuts earlier this year.
“We’re finally starting to see sustained confidence return to the economy. Homeowners and buyers are reaping the rewards of record low interest rates,” said Mr De Martino in a November 5 statement.
“Most of the movement on fixed rate products has been for the longer term products, greater than three years. Hopefully low interest rates keep the Australian economy growing at a sustainable pace.”
Furthermore, the housing construction industry were also supportive of the decision, with Master Builders Australia (MBA) stating the cash rate has been one of the factors contributing to the industry’s recovery.
“There are now a range of indicators that gives the building industry confidence of a sustained recovery ahead,” said MBA Chief Executive Officer Wilhelm Harnisch in a November 5 statement.
“It will help boost the confidence of both the building industry and investors that we have a strengthening and sustained recovery on our hands.”