Continued hold on interest rates give promise of strong spring season
The continued hold on interest rates is expected to bring renewed optimism and stronger buyer confidence to this year’s spring selling season, after months of uncertainty.
The prediction comes as outgoing Reserve Bank of Australia Governor Philip Lowe last week declared “the worst is over” for interest rate rises and announced inflation was now falling.
At its August meeting, the RBA Board left the cash rate unchanged at 4.1% – the third time it has decided to hold rates steady this year.
The hold signifies the longest pause since rates began rising from a record low of 0.1% in May last year. Since then, the cash rate has been lifted 12 times in 16 months in the steepest increase seen in the RBA’s history.
“It is clear that some households who borrowed at low interest rates during the pandemic are finding conditions very difficult, as are some renters,” Dr Lowe told a parliamentary committee in Canberra last week.
“I know it’s been difficult, but the worst is over.”
“Things are moving in the right direction but it’s still too early to declare victory.”
Mont Property Managing Director Matthew Podesta said consecutive holds by the RBA were fostering greater certainty in the market, particularly amongst buyers, with promise of more activity and good prices.
“Interest rates appear to have now peaked and I’m confident that this will bring an increased level of certainty and a strong spring selling season,” Mr Podesta said.
“Buyers are feeling some comfort from the consecutive pauses after months of doubt, and the longer the cash rate remains unchanged the more confident buyers will feel.”
“I’m hopeful that increased market activity will also mean those vendors who may have been sitting on the fence about listing their properties for sale will take advantage of these positive market conditions.”
“If you’re considering selling your home, now is an opportune time to do it given the low supply levels, increased buyer activity and the potential to achieve a sales price well above expectation.”
Meanwhile, the CoreLogic Property Pulse Spring Preview report, released this week, shows the number of new listings added to the Australian housing market was 3.3% above the previous five-year average for the first time since September last year.
CoreLogic says advertised stock across Perth is now almost 45% below the previous five-year average and extremely tight levels of available supply has boosted vendor confidence.