The latest cut in official interest rates by the Reserve Bank of Australia (RBA) has stirred up consumer interest in the real estate market, a national survey has found.
The poll by leading mortgage broker Loan Market which asked ‘Has the latest RBA rate reduction increased your interest in purchasing property?’ found 62 per cent of respondents said they were now more interested to purchase real estate.
Loan Market Corporate Spokesman Paul Smith said 42 per cent of the 785 online respondents said their interest had risen slightly while 20 per cent believed they were ready to buy now.
Mr Smith said 15 per cent of those surveyed were waiting for more interest rate cuts and 23 per cent reported that this month’s 25 basis points reduction – which lowered the cash rate to 3.25 per cent – had made no impact on them.
“It’s a positive for the market that the latest RBA rate cut coupled with the 75 basis point reductions earlier in the year have clearly stimulated consumers,” he said.
“Downward rate movements are an obvious advantage to those looking to purchase property and it’s equally welcomed by households that have had their repayments reduced so they can combat other rising costs of living.
“Although not every lender has adjusted their cash rate in-step with the RBA, a considerable amount of competition has opened up in the market because of rates dropping, particularly with fixed versus variable rates.”
Mr Smith said while the outlook for rates remained bearish for the months ahead, there would still remain a group of consumers who were less concerned about RBA rate movements over other aspects of the economy.
“There is still a core group of people who are waiting to see the direction of the overall economy before they consider purchasing property,” he said.
“The RBA has plenty of ammunition to respond to any further deterioration of the economy and some economists are even predicting the cash rate could go below 3.0 per cent before the end of this year, or in early 2013.”
Mr Smith said the RBA has more room to move than most of its central bank counterparts withAustralia’s cash rate still higher than more than 30 other countries.