First National Real Estate | Savins says low official cash rates mean a wealth of opportunity for first homebuyers, people who consider themselves long-term renters, and property investors – both residential and commercial.
The Reserve Bank of Australia’s official cash rate has a range of effects across the economy, and it definitely lifts the average buyers’ property prospects.
‘In February the Reserve Bank of Australia (RBA) decided to cut the official cash rate (OCR) by 25 basis points, bringing it down to 2.25 per cent. This was the first change in the OCR in almost a year and a half, and it made waves in the property market’ said First National Real Estate | Savins principal, Ian Savins.
‘It’s important to research the cash rate, whether you’re looking to retire or open an investment portfolio. Doing your homework can offer you some insight into how to make the most of the current environment – and alert you to what to do if there’s another cut’.
When interest rates go down, it doesn’t directly drag the interest rates set by lenders down, however the OCR does guide their direction. Speaking about the February rate cut, CoreLogic RP Data’s head of research Tim Lawless said that interest rates following suit took the interest rates to their lowest point since 1968.
‘This means near-unprecedented opportunities for Australians to buy real estate at great value, and people aren’t hesitant to take advantage. Demand appears to have been re-energised by less expensive debt’ said Mr Savins.
Separate statistics from CoreLogic RP Data showed that in the lead-up to Easter this year, auctions were breaking new records for volume. This occurred in Perth, Adelaide and Sydney, which is the capital enjoying the strongest auction clearance rates.
‘Evidently, there are a lot of positives flying around for Australian property at the moment. The OCR generally acts as a stimulus for the wider economy, and it appears that at the moment a particular shot in the arm is being given to property’ said Mr Savins.
‘Even though prices across Australia have been generally rising for property, the cash rate situation can actually make it easier for people to buy a home, despite high prices. Also, first homebuyers can still claim the benefits of first homebuyer grants’.
Issued by: First National Real Estate | Savins
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