LOWER RATES MEAN MORE MONEY
HOMEOWNERS will be almost $50 a month better off thanks to the recent interest rate cut.
The Reserve Bank of Australia slashed rates for the second time this year with the cash rate dipping to a record-low of two per cent after the latest fall of 25 basis points.
Figures show a 30-year $300,000 home loan with the average standard variable rate of 5.25 per cent attracted monthly repayments of $1667.
This meant the latest drop would see an additional $46 on average in homeowners’ hands each month.
The decision to again cut interest rates will give a timely boost to the WA real estate market and help underpin property prices during the coming year, according to Acton director Travis Coleman.
“Over the past three years, official interest rates have more than halved and are expected to remain low for the foreseeable future,” he said.
“This decline in interest rates, however, is part of a long-term trend when you consider that official interest rates were 7.25 per cent in 2008 and now just 2 per cent.”
Mr Coleman said the record-low rates made it a great time to buy property in Perth, especially as it had not experienced the same boom in property prices as Sydney or Melbourne.
“Over the past year, the number of properties listed for sale in Perth has jumped by nearly 40 per cent to around 14,000, meaning buyers are in a much stronger position to negotiate with sellers,” he said.
“With property prices remaining generally steady in WA and in particular Perth, this cut in interest rates will mean that homes have become even more affordable.”
Mr Coleman added there was indication the interest rate cut could see more first-home buyers buy an established home rather than building a new one, a trend emphasised by evidence of slowing new land sales.
“In addition, lower interest rates will encourage more established home owners to upgrade their homes as prices in the top end of the market are still very soft,” he said. “With predictions there may be additional interest rate cuts during the coming year, the outlook for the local property market remains very positive as interest rates play a decisive role in the housing market.”