After last month’s historic cut in interest rates, the RBA has adopted a ‘wait and see’ approach, leaving the official cash rate at an all time low of 2%. This came as no surprise – in fact, not one of the 28 economists surveyed by Bloomberg is expecting the RBA to drop interest rates any further this month.
The property market remains buoyant – although home values dropped 0.9% in May, this is being blamed on the usual seasonal factors.
Low interest rates driving house values
Corelogic RP Data May figures released yesterday also show dwelling values rose 3.8% over the first four months of the year and 9% over the past 12 months.
“The weaker reading across the May results is likely to be short-lived, with the Index expected to show better growth next month,” says Tim Lawless, CoreLogic RP Data head of research.
If you’re wondering whether the colder months means it’s time to hold off selling until Spring, this may not be the case – auction clearance rates are still at a record high, particularly in Sydney.
With some retail sectors getting ready to take advantage of the tax breaks to small businesses that were announced in the May Federal Budget, this plays well with the fact the small business confidence remained steady in April. And with confidence comes intent to buy. This may well extend to the housing market – so if you’re considering selling or buying, the winter months may just be the perfect time.
So with interest rates continuing to remain at record lows now could also be the time to review your current lending requirements, as always, if we can help you in any way, please don’t hesitate give us a call – we’re here to help.