Rates Stable but not for long
HOMEOWNERS may have missed a rate cut today but it is becoming increasingly likely by the end of the year, according to the nation’s leading real estate network LJ Hooker.
Chief executive officer Grant Harrod believes a reduction is needed to maintain downward pressure on the Australian dollar and boost the overall economy.
"I think there is a higher than average possibility we will see a cut by the end of the year," he said.
"We are starting to see unemployment rise and consumer confidence isn't fantastic and we need something to stimulate the economy.
"We know property market strength is starting to pull back and that has always been one of the big fears for the RBA."
Mr Harrod does not believe a rate cut would propel prices in high growth markets such as Sydney and Melbourne, however, would help property sales in Perth, Adelaide and Hobart.
"I wouldn't be suggesting we would see a big impact to the property market but it would be a big vote of confidence," Mr Harrod said.
"There is enough competitive pressure on banks to pass it on to owner/occupiers but still hold for investor loans.
"What it means is that mortgage holders would see additional discretionary spending money which is favourable for families."
An increase in listings this spring has resulted in a drop in auction clearance rates, however, Mr Harrod believes more time is needed to see what impact the increase in supply is having on sales.
"Price is an issue but whenever there is a change in the market, vendor expectation will always lag," said.
"The worse result is for a property to sit on the market for a long time.
"There are benefits for the auction process - it's visible, has a defined and helps determine a price."