Property market shows signs of improvement
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.