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Staff Reporter
The Reserve Bank's decision to keep rates on hold is enough to improve consumer confidence, according to the Real Estate Institute of South Australia (REISA).
According to REISA president Greg Moulton, the decision shows that lower rates are sustainable and will prevail for some time.
“REISA members are saying that the first two months of the year have started to show some promising signs that housing stock is starting to move and the low interest rates are no doubt an important factor in purchase decisions,” he said.
“Of course a further cut to rates would be welcome, but the reality is, our current interest rate levels are very low and with this expected to continue for some time, people are really starting to turn back to property as an investment decision.
“After a tough few years, it is good to see a spring in the step of the market a little more. Whilst the recovery won’t be overnight, incremental increases in volume is what is needed to boost the market,” Mr Moulton said.
President of the Real Estate Institute of Australia, Peter Bushby, agreed that further cuts would spur more first home buyers to the market.
“A rate cut this month would have improved affordability for first home buyers but may not have been enough to encourage a purchase,” Mr Bushby said.
“The proportion of first home buyers in housing finance commitments in December 2012 was 14.9 per cent - less than half of that in May 2009 and well below the long-term average of 20.2 per cent.
“Data for the December quarter 2012 suggests we can anticipate housing affordability to improve further, but we don’t expect any significant upturn in first home buyers’ activity,” Mr Bushby said.
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