Rate cuts take time to filter through
Rate cuts take time to filter through the economy, but our research shows the property market responds quickly.
This rate cut will lead to cheaper loans and add momentum to the housing market in the coming months.
It could also fuel construction, leading to property-related jobs and an uptick in tax revenue for the government.
In the marketplace we have seen house prices rising on average since the last RBA rate cut in June, so vendors have been buoyed heading into spring selling season and will continue to be.
The LJ Hooker network of mortgage brokers see the rate cuts in their lead sheets.
Each time the Reserve Bank of Australia lowers the cash rate there is a noticeable increase in inquiries from those looking to purchase property.
Borrowing rates to buy a home were historically low even before this rate cut.
Market rates for three-year fixed-rate mortgages are 113 basis points below the average since 2000.
This will encourage more Australians to buy property, whether a primary home or an investment, in the coming year.
Interested buyers are still adjusting to the last RBA rate cut in June.
This new cut will further encourage them to enter the market.
L. Janusz Hooker is deputy chairman of LJ Hooker deputy chairman
