Good time to buy houses?
Is the current real estate market a perfect example of buy in “gloom” and thus the perfect time to use a buyers agent? There is no doubt that the economy is misfiring. It’s not just manufacturing, but construction and the services sectors have surprised all by suffering dramatic slowdowns. However, if you happen to be digging holes or laying pipes in Western Australia, times are good right now with investment booming.
Is it any wonder that property buyers are feeling a little fragile?
This property at 112 Wolseley Road, Point Piper certainly has wow factor. It is on the market for $40.0 million after reportedly being worth $55.0+ million 6-months ago. But it’s not just the top end that is feeling the pinch. Australia wide, Mums and Dads are seeing their homes exchange at 30-40% lower than pre GFC
. Even market experts find their crystal balls somewhat clouded. Only 2 of the 23 economists expected the Reserve Bank to cut interest rates by half a percent in May. If they don’t know what’s going on, what chance for the rest of us!
Interest rate cuts
I believe two factors influenced the Reserve Bank to give the Australian Economy an adrenaline shot buy cutting the cash rate by half a percent. Firstly banks have not been passing on the full rate cuts from past changes due to their own increased borrowing cots. And secondly the Australian Bureau of Statistics released numbers in March showing buyers for new homes had all but evaporated. This aggressive rate cut has been a great move as the Central Bank has now shown that they will be proactive in kick starting the sluggish sectors of the economy
Good news for house buyers
Importantly the Central Bank has signaled there might be more rate cuts ahead. This has finally taken the sting out of the Australian Dollar seeing it move back closer parity with the US Dollar. As a Buyers Agent, we are now starting to see more inquiries from ex-pats looking to take advantage of the big discounts in the property market. If ever there was a time to get expert financial guidance about property in these uncertain times, this is probably it. History has proved that a weakening currency and declining interest rates tend to give the property market the adrenaline shot it’s lacking
. Many buyers see this as an opportunity to get bang for their buck. Now about that $40m property!;
“By Shane Clinton”