In an AAP survey last month, 9 out of 13 economists said that the Reserve Bank of Australia would cut rates in the coming six months. While an actual rate cut has not come about, the RBA has decided to keep the interest rate steady at 3% in its April meeting. The Reserve Bank has also made it clear that future rate cuts are not completely out of question, especially if the economy comes under pressure.
Real estate market analysts have been keenly following the RBA actions in this regard ever since the interest rate touched a historic low of 3% in December last year after a rate cut of 25 basis points. The low interest clime has positively impacted the real estate market by giving home buyers a great incentive to acquire property now.
Falling Interest Rates Bring Homes to Most Affordable Levels
It is not wrong to say that with the controlled interest rates in the economy homes have become much more affordable for Australians everywhere. In fact, this situation has brought the real estate market to its most affordable levels in three years. Incomes are on the rise in most industries and with the falling interest rates, this brings about the ideal environment for fresh investment in the real estate sector.
Property Markets in Capital Cities Starting to Show Good Recovery
Many capital cities have started to show some real progress where property prices and buyer activity is concerned. Sydney is leading from the front in this respect, having moved back to the same position that it held before the property slump of 2010. Melbourne has also proved critics wrong with prices moving upwards contrary to expectation.
When viewed as a whole, Australian housing markets have shown value increases all over the month. The national dwelling value improved 1.3% last month, the second best month wise performance after the property slump. Apart from Adelaide, every other capital city has some positive change to report in March 2013, making this month a very successful one for the real estate market across Australia.
The trend has clearly changed for now. What remains to be seen is whether this positive change takes place across all segments of the property markets and whether it is sustainable in the coming months. Meanwhile, investors are well advised to acquire their choice properties right away before prices start zooming upward.