In some positive news for the property market, recent reports are suggesting that buyers may be responding to the fact that interest rates have now been kept on hold for seven consecutive months, with a lack of immediate indication that rates will rise – for the next month at least.
A recent article by Ruth Liew in the Weekend Australian Financial Review entitled 'Rate freeze gets cheaper houses moving' (June 11 – 12), quoted Century 21 Chairman and Owner, Charles Tarbey, who commented that the prolonged hold on rates had helped stimulate buying activity, with more affordable suburbs showing particular movement.
Charles named suburbs such as Fairfield (in Sydney's west) and pockets in the lower Blue Mountains of NSW as areas that first-home buyers and second-time purchasers were targeting.
He also noted that Salisbury in the north of Adelaide, and Williamstown and Craigieburn in Victoria were also experiencing healthy buying activity as interest rates continued to be left on hold. Coastal areas, however, were not faring so well, especially areas with a high proportion of holiday homes. Nor were sales improving in prestigious suburbs.
Charles mused that anybody buying today would have factored a rate rise or two into their buying decision. He feels that people are prepared for the possibility of rates going up.
I think it will be most interesting to see how buyers respond to the Reserve Bank of Australia's next rate rise – whether it occurs over the next couple of months or more toward the end of the year. It seems very much that people understand that an increase is on the cards; the uncertainty appears more to surround the issue of when.
If you have any real estate questions or are interested in understanding how a rate rise will impact your purchase, please don't hesitate to stop in at one of the hundreds of Century 21 offices around Australia and talk to an agent about your situation.