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Key Points
- The RBA has reduced the cash rate from 4.1 to 3.85 per cent.
- Rate cuts can lead to moderate increases in property prices according to a market analyst.
- Darwin and Melbourne remain the most affordable capitals considering median income and property prices.
From property market watchers to keen buyers — anyone with an interest in Australia’s real estate sector will be looking for an answer to the big question: Will the rate cut make housing more affordable?
Source: SBS News
Will the rate cut drive house prices up?
“We’re already seeing dwelling dollars relative to household incomes quite stretched. In fact, at record highs, we’re likely going to see that stretched affordability potentially worsen further from here.”
“Buying a home is a very high-commitment decision, and if you’re more confident in your ability to hold a job and pay down your mortgage or get financing, then you’re probably more willing to make the high-commitment decision like that.”
Where are the ‘healthy’ property markets?
“Melbourne’s down towards the bottom of the pack in terms of that affordability ratio, which is a very healthy thing.”
More affordable than Melbourne were the ACT at 6.1 and Darwin at 3.9.
How much could you save monthly if the rate is cut?
A rate cut can also be a good opportunity to see what lenders are offering customers on a variable mortgage loan, according to Sally Tindall, data insights director at financial comparison site Canstar.
Credit: SBS News
Doing research ahead of time on the offerings of different banks can be a “bargaining chip” in negotiations,” she said.
