News on interest rates looking positive
As many regular readers would know, the team at Barry Plant Gladstone Park have been feeling quite positive about the future of the local property market for some time now. There are several factors that have contributed to this, but one important reason that the current levels of strong buyer confidence are likely to continue relates to the changing outlook on official interest rates.
If you look back to the last few months of 2018, most people in the financial world were still forecasting that 2019 would be the year when official interest rates would start to move up from their record low of 1.5 per cent. However, that picture has definitely changed over the Summer, to the extent that not only do most economists now doubt that the Reserve Bank of Australia will lift rates this year, but many believe they could move in the opposite direction.
Indeed, if you look at the reports coming out of the financial markets where investors place large sums of money effectively ‘betting’ on the future direction for interest rates, an increasing number of well-informed investors are now backing a cut to official interest rates at some point this year.
Last week’s release of the latest Consumer Price Index data won’t have harmed the possibilities of a rate cut either. They confirmed that 15 of the last 17 quarters have had a CPI figure below the RBA’s annual target of 2 to 3 percent, which means that the overall economy is not growing as fast as the RBA would like. Now we’ve seen the RBA revising its economic forecasts for growth downward as well, so it’s no surprise that forecasts of another cut to interest rates are getting louder.
Of course, on the property front, any additional talk about reduced interest rates can only add to the confidence levels among home buyers.
As we mentioned in last week's update, we are now in the early stages of a ‘window of opportunity’ for anyone considering selling. Apart from the Labour Day weekend in March, the next seven weeks allow you to plan a virtually uninterrupted sales campaign right through to the start of April. However, after that period you will need to factor in the school holidays, the Easter break and the Federal election, so you’d be wise to get the wheels in motion sooner rather than later.
Remember, if you need any help in preparing your property for the market, or advice on any real estate topic whatsoever, feel free to give us a call at any time on 03 9330 1088.