Historic cut in rates good for buyers
LJ Hooker has welcomed the Reserve Bank of Australia’s move to cut interest rates to historic new low levels, saying it is the right decision for the nation.
Grant Harrod, LJ Hooker CEO, said the RBA had acted to deliver good news for homeowners, particularly for those living outside of Sydney and Melbourne.
“It is a significant historic decision and it is going to be of benefit to the economy, encourage businesses and in turn address unemployment,’’ he said.
“Overall it will encourage buyers who have been sitting back watching the market and also keep investors active.’’
While Sydney house prices have dominated commentary, Mr Harrod does not believe the rate cut will overheat the market, although it should remain buoyant. It is likely to result in more listings, which have been at low levels and fuelling demand.
Higher prices have seen a shift in buyer behaviour in Sydney and Melbourne. People are no longer selling and then buying because they fear they may not be able to purchase in the same market.
“It will be interesting to see if the rate cut will change attitudes and if it does, then we should see more stock which should also help contain prices.’’
Self-funded retirees may be tempted to move cash out of banks and into higher yielding investments, like property around the country.