RBA could cut interest rates further
The Reserve Bank of Australia’s deputy governor says that the bank is in a position to cut interest rates below the current historic low; but only if the economy needed stimulus. Philip Lowe was addressing a conference of Australian economists yesterday and noted that cutting interest rates to 2.5 per cent has had the desired effect of getting the economy moving; including the property market. He said that one aim of lower rates bringing higher property prices was that it would boost the construction sector. This, he acknowledged, has been achieved but the bank is cautious about it going too far. While concluding that the market was not in a serious state; such as the bubble that some economists like to suggest; Mr Lowe warned that the growth of investor home loans, especially interest only ones, could prove to be too risky. The RBA has no plans to change the interest rate either up or down in the foreseeable future, but the deputy governor said that having the option of cutting rates if necessary was a good one to be in.
NSW could see 50,000 home starts in 2015
The Housing Industry Association has released the spring 2014 edition of its New South Wales Outlook, the most comprehensive report card for the NSW housing market. It shows that the market is set to exceed expectations with housing starts rising 9.5 per cent this year and a further 4.5 per cent in 2015. HIA Executive Director, New South Wales, David Bare says: “New home building in NSW is going from strength to strength, with new home starts set to top 50,000 during 2015.” Home renovations activity in NSW is forecast to increase by 8.0 per cent this year and by 3.9 per cent in 2015.
Prestige market booms in 2014
Prestige home sales have increased 12 per cent in 2014 according to data from LJ Hooker. The report shows that those properties priced in the top 20 per cent of dwellings are attracting far more interest this year and prestige units are doing even better at 18 per cent. The boom has come from two angles; growing confidence and lower home loan repayments have prompted interest in properties priced at over $2 million; and renovations have been boosted, one again by low interest rates and higher confidence, putting more properties into the higher bracket. Sydney continues to lead the prestige market although Brisbane has also seen a resurgence this year.
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