Powered by MOMENTUM MEDIA
realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Bank rates critical in property recovery

By Staff Reporter
23 September 2009 | 1 minute read

As the first home owners grant boost starts to phase out, the banks may determine whether the current property market revival can be sustained, according to First National.

Advertisement
Advertisement

“With prices stabilising and consumer confidence high, the only thing that could stop the recovery continuing and strengthening, would be the banks increasing their variable rates either with, or ahead of, the Reserve Bank increasing their rates,” First National’s chief executive officer Ray Ellis said.

In August, banks were quick to raise the fixed rates ahead of the reserve bank’s announcement it would hold interest rates until at least early in 2010.

But as pressure mounts on governments to rein in their support of the banks, there is speculation the banks will increase their rates early to offset any potentially negative impact from this move.

Mr Ellis said if first home buyers stop buying, there is potential for the emerging property recovery to stop or even reverse unless other market segments are stimulated.

“There are signs throughout our network that second and third home buyers, including investors, are taking advantage of current conditions, helping push prices up as they go,” Mr Ellis said.

“But, the threat of rising interest rates may impact on this promising trend.”

Since the grant and boost were introduced in September last year, more than 59,000 Australians have taken advantage of the highest levels of housing affordability since 2002.

Bank rates critical in property recovery
default
lawyersweekly logo

Tags:

Listen to other installment of the Real Estate Business Podcast
Do you have an industry update?

top suburbs

12 month growth
Travancore
49.78%
Timboon
49.57%
Dolphin Point
49.51%
Nyah West
49.42%
Preston Beach
49.29%
Newington
48.97%
Killcare Heights
48.89%
Wundowie
48.77%
Homebush
48.44%
Glenside
48.28%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.