Residential property market feels interest rate impact
The link between the official interest rate set by the Reserve Bank of Australia (RBA) and residential property prices have been examined by a new survey from two leading research firms.
According to the home value index produced by RP Data and Rismark, the price of dwellings increased by 0.1 per cent over the month of November.
In Sydney, this change meant that median house prices have stabilised at around $495,000 after a period of negative growth.
Director at Rismark Christopher Joyce commented that this change could have been brought about by the RBA's decision to reduce the interest rate to 4.5 per cent in November.
He also said that the decision to cut the cash rate by a further 25 basis points to 4.25 per cent could have a pronounced impact on local markets over the next few months.
Speaking to The Australian on December 30, Joyce asserted: "If the second cut in December was fully passed on by banks, we expect a healthy recovery in the first quarter [of 2012]."
The fact that the local real estate markets have been able to maintain a fairly stable level of momentum during the last few month of international financial uncertainty means that they are well placed to begin growing again once consumer sentiment stabilises.