CENTURY 21 PORT DOUGLAS : RATE CUT WILL DELIVER BOOST TO PROPERTY MARKET
Century 21, the largest real estate organisation in the Asia Pacific region, believes that today’s decision by the Reserve Bank of Australia (RBA) to lower the official cash rate to 3.5 per cent will bring needed stimulus to the Australian property market.
“In a decision that is welcome news for residential real estate, the Reserve Bank has further cut the official cash rate – a move that we expect will spur increased activity within the property market,” said Chairman of Century 21 Australasia, Charles Tarbey.
“This latest rate cut will put further pressure on banks to increase the competitiveness of their interest rate terms, which should increase housing affordability and therefore incentivise prospective buyers to invest.”
At its June meeting in Sydney today, the RBA elected to cut the official interest rate for a second consecutive month, citing international economic uncertainty, weakening financial market sentiment, modest domestic growth and favourable inflation forecasts as key factors in the decision. Despite an official cash rate cut of 25 basis points, many analysts have predicted further rate cuts for the remainder of the year.
The decision follows several months of heightened concerns surrounding European economic conditions, turbulent global financial markets, weakened consumer confidence and falling national home values.
“Obviously consumers are concerned and uncertain about what is going to happen in Europe and in the broader global economy, which has made them more likely to hold on to their money. Such diminishing confidence has certainly been felt by the residential property market,” continued Charles Tarbey.
Released last week, the latest RP Data-Rismark figures showed that median house prices across Australian capital cities had fallen 1.4 per cent in May. The Australian Bureau of Statistics also released figures last Thursday which revealed that residential building approvals had fallen 8.74 per cent in April, reaching their lowest levels since January 2009.