The Reserve Bank of Australia has dropped interest rates for the first time in seven years. This will ease some of the pain for people struggling to pay off their mortgage, but will it help the real estate industry? I think it will … just a bit. It won’t send property prices skyward, but it will give the market a little bit of confidence to move forward. People will be a little more comfortable putting their house on the market, and properties currently on the market might actually start to move.
In a previous post at Real Estate Daily I questioned the wisdom of Terry McCrann, as did most economists, when he declared that interest rates would drop in September. It looks like the old master got it right.
What next? Some are suggesting that there may not be another rise too soon, as nothing in the RBA statement indicates a further drop in interest rates. However, others are more positive, suggesting that we could see up to 7 more interest rate cuts over the next couple of years.