More Australians are looking at buying their own homes following the historic but not entirely unexpected rate cut announced last week by the Reserve Bank of Australia (RBA).
Sydney-based mortgage broker Geoff Schippers said he has seen an increase in clients looking for homes to buy.
“At least 70% of my clients are now contemplating investing in a residential property or properties,” said Schippers, principal at Scout Finance. “A few months ago that proportion was very small. People who were sitting on the sidelines are now motivated to get into the market.”
The RBA’s rate cut to 2.25% on 3 February allowed Australia to join a number of other countries that have resorted to lowering home loan rates in hopes of boosting economic growth amid unemployment highs.
“The rate cuts by the banks will provide a real impetus for the property market,” said economist Savanth Sebastian of the Commonwealth Securities Ltd., a unit of Commonwealth Bank. “There is certainly a lot of risk in an asset bubble forming in property.”