Agents urged to act now on rate cut

Yesterday’s surprise reduction in interest rates has given agents a golden opportunity to market to potential buyers and sellers.

Real Estate Results Network chief executive Michael Sheargold said agents should already have texted people about the Reserve Bank’s decision to lower the cash rate to a record-low 2.25 per cent.

Mr Sheargold told Real Estate Business that agents should contact everyone who has been considering listing their property since late 2014.

“Let’s get clear on what that means to those particular people. If there are more buyers coming into the market that typically means more competition, and that is the key thing that will have an impact on sales price,” he said.

Mr Sheargold said agents should also contact likely buyers – although he added that the news would be more relevant in less affluent markets.

“If someone was buying in Sydney's eastern suburbs or Toorak, the rate cut is probably not going to make that much of a difference,” he said.

“But in some of the outlying areas it will make a significant difference to the confidence and buying power of someone and their ability to put their hand up at auction and the ability to extend themselves in terms of a great offer.”

Professionals chairman Ian Cornell said agents should not only contact would-be first home buyers but also landlords who might be in the market for another investment property.

“Why wouldn’t you be thinking of buying a second property now? How much more proof do you need?” Mr Cornell told Real Estate Business.

“Interest rates have been… down for 18 months and will probably be down another 18 months by our estimation.”

Mr Cornell said agents should explain in their marketing that the rate cut is a welcome shot of confidence for the economy.

Meanwhile, Real Estate Institute of Australia president Neville Sanders said yesterday’s rate cut would improve housing affordability.

“Since the Reserve Bank began its cutting of the official interest rate in late 2011, the proportion of the median family income required to meet monthly loan repayments decreased 4.4 percentage points from 34.8 per cent to 30.4 per cent,” he said.

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