How has the cash rate cut changed the real estate market?

The national household-debt-todisposable-income ratio remains at a record high of 189.6 per cent.

The Wage Price Index (WPI) grew at an annual average of 2.2 per cent in the five years to December 2018, which sits lower than the average annual growth of 3.3 per cent in the previous five years to December 2013.

However, the 2018 slowdown in the real estate market, demonstrated by the 8.2 per cent decline in national dwelling value since peaking in October 2017, made some impact on consumer confidence as the market shifted in favour of buyers.

The recent two cuts to the cash rate to historic lows surprised many and has become a signifier of the RBA’s nod to the government to begin pulling its own levers to aid the sluggish national economy.

“The uncertainty generated by the trade and technology disputes is affecting investment and means that the risks to the global economy are tilted to the downside,” Governor of the Reserve Bank of Australia Philip Lowe said, in his statement during the recent rate cut.

He continued with a nod towards the efforts of international governments in taking direct action in their own economic performance.

With the rate of decline in national dwelling values for May slowing to 0.4 per cent, as reported by CoreLogic, it is expected that improved consumer confidence will create similar results for June, pushing the market away from a further downturn, increasing volume numbers and decreasing the average time spent on the market as we enter the busy spring period.

Recent auction and sales results in Victoria confirmed this turnaround.