Oracle Lending Solutions believes the mortgage activity after the first rate cut announcement has been “phenomenal”, citing a 40% increase in home loan inquiries.
“The light’s turned on in a lot of people’s heads and the recent rate reduction has sparked them into being more aggressive in the purchase of property. Money is as cheap as it has been in 40 years,”
Managing director Angelo Benedetti was quoted as saying on News.com.au.
Many experts predict the RBA will cut the official cash rate again next month due to last week’s poor employment data and economic woes. Some industry watchers also anticipate more rate cuts by the end of 2015.
“People are saying ‘how much lower can they go?’ and real estate agents are getting a lot more offers. It’s not just people wanting to save money — it’s people saying now is a good time to buy and they are starting the pre-approval process,” said Benedetti.
Both Shane Oliver and Paul Bloxham, chief economists of AMP Capital and HSBC respectively, are foreseeing more rate cuts this year.
BetaShares chief economist David Bassanese said a low 1.5% official interest rate could emerge as well.
“The RBA has demonstrated its concern with economic growth. It doesn’t see much of an economic upturn and I think in the next few months it will continue to be disappointed and they will have to keep cutting,” he said.
However, for Smartline Personal Mortgage Advisers manager Richard Bradshaw, poor employment may leave people still “sitting on their hands” in a couple of weeks due to fear.
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