RBA cuts might increase buyer enthusiasm but won’t be enough to see serious growth in the market as buyers linger over rising living costs and macro issues such as the European debt crisis.
This is according to McGrath Estate Agents CEO John McGrath, who said that interest rates, while an important factor in people’s purchasing considerations, weren’t the only influence on people’s psyche. “The European problems are a big dark cloud and if they’re resolved I think that will have a much greater positive impact on the actions of buyers than a quarter per cent rate cut.”
McGrath added that while Australians wait for more positive signals, green shoots of growth are emerging. First home buyer activity has strengthened the market under $1m, while blue chip markets hit hard by the GFC, including the Gold Coast and Byron Bay, are showing new activity across a range of price points. Many regional markets have also seen new activity, with investors attracted to affordable properties in lifestyle areas with strong local economies.
Meanwhile, the prestige market is still lagging, McGrath said. “We need to see unemployment down, retail spending up, a resolution in Europe, improved bonuses and a good consistent quarter on the stock market for the prestige sector to move. I think we’ll see people getting back on the horse in 2012, as buying opportunities above $3m are exceptional.”
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