RBA’s record interest rate cuts have buyers buzzing in Townsville
THE Reserve Bank of Australia’s highly anticpated announcement of a historic rate cut has the Townsville property market buzzing, with first home buyers gearing up to pounce, and investors expected to get back into the local market.
The cash rate which was cut by 25 basis points to 1.25 per cent has not been this low since it was first regulated in 1990.
Sales co-ordinator at Ellis Developments Meredith Sweeney, said the recent election and policy changes has stirred up the market.
“75 per cent of our clients are first time buyers and our pipeline is approximately double of what it normally is,” Ms Sweeney said.
“The confidence from the election combined with these positive government programs have our phones and emails going off.”
Phillip Lincoln who is planning to buy his first home with his wife at Haven in Townsville, said the cut will help with the process of securing finance.
“This cut is definitely going to make financing it easier for us,” Mr Lincoln said.
“Buying has been something we’ve been wanting to do for along time but it just felt unachievable, and I think it is for a lot of people.”
REIQ Townsville Zone Chairman Wayne Nicholson said the cut is also a great incentive for investors to get back into the market.
“It will allow anyone thinking about getting into the market a great opportunity to do that,” Mr Nicholson said.
“It’s great for first time buyers, and hopefully it will bring investors into play with prices down, interest rates low, and rents at a reasonable price.”
Principal at keyes & Co Real Estate and Regional Director at REIQ Damien Keyes, said the cut is also likely to boost the higher end of the property market.
“It’s just another piece in the buyer confidence puzzle,” Mr Keyes said.
“The cut on interest rates is going to stimulate buyers, and this coming off the back of an election will be a huge catalyst in driving values up in the property market.”
“I think it might stir up some activity at the high end of the market as well, in cases were people have been thinking of upgrading – It will give them that push to do it.”
The cut does not only benefit new buyers, but it could help existing mortgage holders with a variable home loan if their lender decides to pass on savings from the rate cut.
Insights manager at finder Graham Cooke said the cut gives buyers a good opportunity to shop around for their ideal loan rate, but said it doesn’t mean the full cut will be applied to every loan.
“While many lenders may pass on a cut to their customers, you may not see the full 25 basis point cut applied to your loan,” Mr Cooke said.
“Keep an eye on your lender’s website and digital channels to see how they are responding to the rate cut and how this will affect your mortgage. If you’re not satisfied, don’t settle — this environment makes it a great time to go home loan shopping.”
He said the easing of monetary policy is expected to continue throughout the year with experts predicting an additional one or two cuts.
“This is uncharted territory for us and if two more rate cuts are enforced this year, we could potentially see a rate of 0.75 per cent which is unheard of in Australia.”
“With interest rates dropping, and loans becoming both cheaper and easier to attain, this could very well be the turning point for the slumping housing market.”