The rise in the official cash rate on Tuesday should not hurt the recovering housing market, Ray White’s joint chairman Brian White has said.
According to Mr White, the Reserve Bank of Australia made it clear the near record-low interest rates of 3.0 per cent had been an emergency measure during the global financial crisis and were bound to increase in the future.
Mr White said the fact the Australian economy was among the best performers in the world had given consumers a great deal of confidence and this had flowed on to the housing market – which was in good shape nationwide and likely to stay buoyant.
“This 0.25 per cent rate rise was expected, it was just a matter of when, and people will anticipate rates will return to more traditional levels,” he said.
“I think we can afford a couple of interest rate rises, and the confidence in the economy and the real estate market will override any concerns about where rates are headed.”
Mr White said spring had already seen strong residential real estate sales nationwide, with auction clearance rates in some suburban Sydney markets sitting at over 80 per cent in recent weekends.
“There’s no reason why this highly active market shouldn’t continue.”
Mr White said the first home buyers cashing in on the boosted grant scheme had driven the property market during the first half of 2009 but now people upgrading their homes and property investors were more active.
“The one thing these people share is growing confidence about the Australian economy and the direction we are heading,” he said.