There is no truer statement in the business of Real Estate. If enough people believe in something it can shift the market in either a positive or negative direction.
Take for instance Interest Rate fluctuations and how they influence market sentiment and ultimately values. If you think back just 6 months ago, about the time they caught up with Osama bin Laden, there was a general perception that interest rates would increase. This perception, combined with the continuing uncertainty of the European and US economies, was making buyers hesitant and sellers nervous.
Fast forward to today and we have just had our first interest rate cut in over 30 months and the general consensus is that we have a few more to come. A move Westpac Chief economist Dr Bill Evans predicted back in July this year.
Dr Evans believes that we will shave another 0.75% off the Cash Rate during the course of 2012, which is sure to bring a smile to the face of all mortgage holders, and this is giving particularly First Home Buyers more confidence to act now and take advantage of the last remaining rebates available to them up until the end of the year.
If rates do fall another 0.75%, and the banks pass this onto the rest of us, effectively your borrowings will be about 10% cheaper or you can borrow 10% more.
The perception that Rates will continue to fall not only gives buyers confidence but the reality is that it allows them to borrow and spend more.
For a professional and honest opinion when buying or selling your investment property, please do not hesitate to contact our Sales Team 7 Days on 9524 0777.
