Interest rates stay put – further incentive to buy new
- August 10, 2011
- Ayda Shabanzadeh
While expert commentary indicated otherwise, it seems that the Reserve Bank decided last week to take the safe approach and leave interest rates on hold for another month. Despite inflation causing concern, the decision not to increase interest rates is definitely going to be in the favour of the property market.
With Queensland new home sales falling by 17.1% in June, according to a survey of Australia’s major residential builders, it would seem that the State Government incentive for buyers of new homes will not suffice on its own to strengthen the property market, and that interest rates will continue to be a determining factor.
This year has definitely provided some very interesting times for the Brisbane property market. The year started with many homes destroyed due to widespread flooding and then a very sober property market followed, containing no good words about property house values. The rental market was immediately inundated, with home owners of flooded properties looking for accommodation. As the Brisbane property market gradually looked more promising over the autumn and winter months and activity picked up again, the State Government announced that it would increase stamp duty by an astronomical amount, while off-setting it with an attractive incentive for all buyers of new homes.
The results have been a flurry of buyers of property in the weeks before the stamp duty increase on 1 August, and an equally impressive wave of enquiries for new homes and developments. Interestingly, all home owners and would-be property buyers understand the Brisbane property market is undergoing a lot of change in multiple directions, and that it will affect them, directly or indirectly. Yes, it is inevitable that demand for rental accommodation will increase as stamp duty and interest rates put pressure on local home buyers. And this in turn is likely to translate to an increase in property investors, keen to capitalise on the opportunities that present.