13 Feb 2017 By: Greg Hocking 0 Comment
Australia’s cash rate held at its historic low of 1.5% on Tuesday.
Finance market commentators had universally forecast the ongoing freeze of the Reserve Bank lending rate, which is the lowest on record and, to my mind, reflects overall national business and consumer sentiment.
A super low lending rate can encourage people to borrow and invest and keep the lacklustre economy ticking over.
But like everything in life, nothing is cookie cutter.
And the real estate market, specifically residential in Melbourne, has already been setting a cracking pace for a solid 18 months.
Victoria’s strong jobs’ market is a part of the reason. Low stock-on-market is also contributing.
This latest news of unchanged rates will only keep things swinging to vendors’ favours this year because, with lenders offering the keenest loan rates in history, mortgage repayments are more affordable to more people.
And this stimulates confidence in buyers, who tell us they plan to borrow in 2017 to upgrade or downsize.
Many are even prepared to spend more to get more desirable properties. They have done the figures. Monthly repayments, at such low rates, will still be manageable.
They see the long-term value of buying in a growing city like our own. Unsurprisingly, bidding has been strong at almost every auction since agents returned to work in January.
This weekend, for example, 81% of 433 listed auctions sold, according to the Real Estate Institute of Victoria. That is remarkable.
Yes, vendors have many reasons to smile and this latest rates’ freeze is the property cherry on top.
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