How will the RBA’s interest rate cut impact Brisbane’s property market?
With interest rates now at a historic low of 1.25 per cent, we look at how this interest rate cut will impact Brisbane’s property market.
This week the Reserve Bank of Australia announced it would cut its cash rate by 0.25 percentage points, taking it to a historic low of 1.25 per cent.
The move had been anticipated for several months, with speculation that further rate cuts would be seen in 2019.
Of the big four banks, only CBA and NAB will pass on the full 0.25 rate cut to consumers.
ANZ announced it will reduce its interest rates on mortgages by only 0.18 percentage points and Westpac by 0.20 percentage points for property owners who live in the property.
With mortgage relief on the way for many Australians, we look at how this interest rate cut will impact Brisbane’s property market.
Economic stimulation for Queenslanders
The RBA’s decision to cut the official interest rate should stimulate the economy by relieving mortgage stress and putting extra cash in the pockets of Queenslanders.
Many economists also felt the recent cut to interest rates was necessary to boost employment growth and reduce inflation levels down to target levels.
Families who have experienced an increase in the cost of living with only minimal wage growth, will welcome the adjustment.
Stabilising property markets
In the past when interest rates have been cut, people would have had the capacity to borrow more and property prices would often trend upwards.
Since values have been on a slight decline in recent times, a rate cut is likely to help stabilise the market and improve buyer sentiment.
Boosting consumer confidence
Over the last 12 months, stricter lending criteria from banks and a decline in property values have made consumers more cautious of their spending habits.
However, since the recent Coalition’s election win, any uncertainty around the government, the proposed changes to negative gearing and capital gains tax, has been eliminated.
An interest rate cut coupled with greater stability within the government, should inject positivity and consumer confidence into the property market.
In Brisbane’s inner-west, we have already begun to experience some recent signs of improvement.
Buyers re-engage in the Brisbane property market
The past few weeks have trended towards an increase in activity in the area, as buyers re-engage with the property market.
Throughout Brisbane’s inner-west, we have experienced improved attendance at open homes and increased enquiry for both apartments and houses.
Buyers now appear more prepared to make offers on properties, where before they had been hesitating in the lead up to the federal election.
These indicators are showing encouraging signs of improved consumer confidence which will bode well for property owners.
Free Local Market Report | 2019
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