Many in the real estate industry have commended the Reserve Bank of Australia’s move to cut rates to a historic low, with one commentator saying now is the time to market investment opportunities to your rent roll database.
The Real Estate Institute of Australia (REIA) applauded the Reserve Bank of Australia’s (RBA) decision to introduce a 25-basis point cut to the official interest rate, bringing the figure to the lowest level since the late 1950s.
The official interest rate is now 2.25 per cent, after one of the longest periods of interest rate stability.
REIA president Neville Sanders said the RBA board had made a considered and accurate assessment of the property market, taking into account economic headwinds Australia and the international community are experiencing.
“The significance of the easing monetary policy is that housing affordability in Australia will improve further. However, we need today’s cut to be passed on fully by lenders,” he said.
Professionals group chairman Ian Cornell said he strongly believes the rate cut provides a market opportunity for the property industry.
“It depends on the set-up of an agent’s office to how quickly you can contact your database and get a newsletter out to the people, but I wouldn’t be waiting until tomorrow, I would be doing it right now,” Mr Cornell told Residential Property Manager’s sister publication Real Estate Business.
“I wouldn’t leave it to only your database of buyers either, I would be sending it out to all the landlords on my rent roll.
“Why wouldn’t you be thinking of buying a second property now? How much more proof do you need?” he added.
LJ Hooker chief executive Grant Harrod said the RBA’s unprecedented move to stimulate the economy should boost employment, wage growth and propel the property market.
“It is most likely to have an impact on markets across the country, particularly for first-time buyers who have felt the pressure of price growth in certain markets over the past 18 months,’’ Mr Harrod said.
“This historic cut will give young people access to cheaper mortgages, something previous generations have not enjoyed, and will hopefully instil them with confidence to come back to the market.”
Mr Harrod said investor activity is expected to rise, as a result of lower interest rates, with potential capital growth and income return making real estate more attractive than other assets.