Continued low, stable interest rates to boost Sydney property market

Record-low-interest-rates-make-housing-more-affordable-_157_71792_0_7077689_300Those involved in the Australian and Sydney real estate industry – ordinary buyers and sellers, as well as investors – are in for some good news. The board of the Reserve Bank of Australia (RBA) has decided to keep the official cash rate steady during June.

The RBA is keeping the cash rate at 2.5 per cent, which it’s rested on since August 2013 – the lowest in Australian history.  This will make obtaining home loans much more attractive for Sydney buyers, which could lead to increased demand for property and more opportunities for home owners to sell.

The Housing Industry Association praised the move as a forward step to keep residential construction, as well as the Australian economy, afloat.

“A shining light for the Australian economy is the recovery in new residential construction activity,” HIA Chief Economist Dr Harley Dale said.

“It is encouraging that today the Bank confirmed the message that interest rates are on hold for a considerable period of time. A period of stability will maintain a positive environment for residential construction activity to boost economic growth throughout 2014 and into next year.”

The construction sector employs more than 9 per cent of Australia’s total workforce according to Master Builders Australia.

The Real Estate Institute of New South Wales (REINSW) believes the austerity of the recent federal budget explained the RBA’s continued holding of the cash rate. REINSW President Malcolm Gunning emphasised that interest rates were important to consider for those getting involved in real estate.

“The run of historically low interest rates will come to an end and we encourage those who are thinking of entering the property market to factor this into their budgets,” Mr Gunning said in a June 3 statement.

If Mr Gunning is right, then now may be a good time to take advantage of these record low rates if you live in the burgeoning market of Sydney.

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