Three years after last reducing the official interest rate, the Reserve Bank of Australia has announced a widely-predicted cut to 1.25%. Many analysts expect a second rate drop in August, and some expect more. Westpac chief economist Bill Evans last week forecast three reductions in the official interest rate in the next 6-7 months.
Buyers’ agent Kate Hill of Adviseable (pictured) says the RBA decision delivers a quadruple effect for real estate markets on top of the trifecta of the election, the end to Labor’s negative gearing policy and APRA’s easing of lending criteria. “It will certainly liven things up a bit,” Hill says.
Property adviser Danny Buxton of Triple Zero Property says there are now increased levels of positivity and activity in real estate. “The positive changes from the past two weeks mean it’s a great time for people to re-assess their goals and get expert advice,” Buxton says.
Realestate.com.au chief economist Nerida Conisbee says the rate reduction will have a positive effect on the market, with history showing that cuts have an immediate effect on search activity.