Steady start for New Year
A DECISION to keep interest rates on hold is not surprising given current economic conditions but a cut still remains possible in the coming months, according to Australian real estate group LJ Hooker.
Grant Harrod, LJ Hooker CEO, said an increase in the number of buyers attending open inspections during January was a positive start for the year. The volatility of the stock market has also brought investors back to real estate.
“Reports about the slowing of price growth has seen buyers become more confident and hence started their property search in earlier in January than previous years, which is a good sign, ’’ Mr Harrod said.
“We have to be mindful January is not traditionally a period with a lot of listings, so it is probably too early to give a true reflection, however, indications have been encouraging.
“Vendors can see demand is still there and the overall economic fundamentals are good for real estate.”
The return of investors could be beneficial for more affordable markets such as the Gold Coast and Brisbane. The lower Australian dollar is also expected to create a demand for housing in tourism centres.
“Sydney is still going to be the first choice but the affordability is likely to see investors re-evaluate other markets around the country,” Mr Harrod said.
Mathew Tiller, LJ Hooker National Research Manager, expects the RBA will act around mid-year but will be dependent on steady economic conditions and property price growth.
“If data shows prices have in fact begun to cool in Sydney and Melbourne, this will give the RBA more confidence that they can cut rates and it won’t overheat the housing market like we have seen over the past couple of years,” Mr Tiller said.