What does the RBA rate cut mean for property?
What has prompted the RBA rate cut?
The long-held 1.5 per cent cash rate was cut to 1.25 following the Reserve Bank of Australia’s (RBA) June meeting. The cut comes after months of speculation from experts and is set to put the economy back on track, with housing being one of the things in its target.
The official statement from RBA’s governor, Dr Philip Lowe said the housing market had seen a slower rate of decline, alongside increasing auction clearance rates and this is likely to continue with latest rate cut. The RBA maintained the 1.5 per cent for close to three years and experts adds that the reluctance to lower rates was based on how it would impact soaring house prices. The softening of the market and slight increase in the unemployment rate being the boost it needed.
What does it mean for the property market?
Commenting on the announcement, Tim Lawless, CoreLogic’s head of research says, “Lower mortgage rates… as well as renewed confidence following the federal election, [means we] are likely to see an improvement in housing market activity.”
“The rate cut announcement is good news for the property sector. We expect to see those homeowners that have been holding off on selling start to come back onto the market,” says hockingstuart’s South Yarra Director Peter Perrignon. Adding, “We’re also seeing an uptick in buyer sentiment following the Federal Election which both buyers and sellers should take into account.”
If you need expert advice on the housing market, make sure to reach out to your local hockingstuart office today.