A General blog by Paul Bennion.
The Reserve Bank of Australia’s decision to cut interest rates to a record low of 2.75% at its May 2013 meeting will give the property market a major boost over the coming months, predicts DEPPRO Managing Director, Paul Bennion.
Bennion said the announcement of the latest interest rate cut comes at just the right time for the property market.
“Many people make the decision to purchase an investment property during May and June to coincide with the start of a new financial year. This latest cut in official interest rates has been designed to encourage more people to invest in property and construction instead of passive income such as cash,” Bennion said.
“With the mining boom set to peak this year, the RBA wants to encourage greater activity in other sectors of the economy, such as property, so that the overall economy remains strong.”
According to Bennion, buying an investment property will be an attractive investment option for people who have built up cash reserves over the last five years, particularly in locations where real estate is currently undervalued.
DEPPRO is predicting that areas such as Brisbane and South East Queensland, in particular, will rebound strongly over the second half of 2013 due to the falling interest rates.
“This interest rate cut may well prove to be the tipping point for investors who will now target properties in Queensland and throughout Australia which they believe to be undervalued and poised for an upswing,” Bennion said.
“These astute investors can now achieve higher returns through property investment than keeping their money as cash in savings,” he said.
Bennion added that the growing expectation that interest rates will fall even further should give investors greater confidence in the property market.