After much speculation over the last couple of months, with plenty of people split over which way interest rates would go next, the Reserve Bank last night dropped them a quarter of a per cent to a new record low of 2.25 per cent.
With the Melbourne property market starting to slow after a robust couple of years, the question is will this next rate cut after months of stability bring more buyers back into the market to get the wheels spinning again?
Michael Robert is from Century 21 in St Kilda and he told The Age that he thinks we won’t see the effects from the rate cut straight away.
“I believe we may not even see a significant difference immediately, considering we are already in the busy season of real estate and there are many people currently transacting in the market,” he said.
“But it’s possible that we’ll see less of a drop off in activity when winter arrives than we would normally see at this point of the year, as a result of a cut.”
Time will tell what effect this new rate cut will have on the property market in Melbourne, Matthew Tiller from LJ Hooker also spoke to The Age and believes it will mean a rise in activity.
“A rate cut is likely to support property price growth across Melbourne over 2015, although this will be at a lower level than the growth seen in the last cycle thanks to a softer economic environment,” he said.
“Investors looking at new projects in the inner ring suburbs and increased activity from first home buyers in the middle and outer ring suburbs would be higher thanks to increased mortgage affordability.”