Prop­erty mar­ket shows signs of im­prove­ment

Port Douglas & Mossman Gazette - - FRONT PAGE -

THE prop­erty mar­ket is turn­ing. Fol­low­ing the Re­serve Bank’s 25 ba­sis point cash rate cut ear­lier this month, there’s a def­i­nite spring in the step of real es­tate prac­ti­tion­ers. It’s been two years of hard slog for most of them, as they sought to win busi­ness and sell prop­erty into a de­clin­ing mar­ket with few in­ter­ested buy­ers. And their re­newed op­ti­mism may be jus­ti­fied. The gap be­tween the per­cent­age re­turn from prop­erty in­vest­ment - the rental yield - ver­sus the fund­ing cost - in­ter­est rates - is nar­row­ing. If this trend con­tin­ues there will be a point at which a crit­i­cal mass of in­vestors and prospec­tive home­buy­ers recog­nise the op­por­tu­nity and de­mand picks up. It’s in­creas­ingly clear that the Re- serve Bank is sig­nalling an­other rate cut be­fore year’s end. Last week’s de­te­ri­o­rat­ing em­ploy­ment num­bers have prob­a­bly set­tled the case for a 25 ba­sis point cut on Mel­bourne Cup day and pos­si­bly an­other 25 ba­sis point cut in De­cem­ber.

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