LOW SUPPLY AND HIGH DEMAND PUSHES PROPERTY MARKET INTO NIRVANA
SUMMARY
• Economic landscape supports the property market .
• Ray White Group books record $ 5.71 billion in sales in October .
Sellers in the Australian property market right now are facing a nirvana moment . There has actually never been a better time to sell than right now . rates , only fixed . Fixed rate loans are typically a lot less flexible , usually with no offset account , and limits on extra repayments and break fees if you want to get out early .
It was an historic week in economic circles . As expected the central bank dropped the cash rate to an emergency low of 0.1 per cent and announced a $ 100 billion “ quantitative easing ” program . But what does that mean , and why did they do it ? Quantitative easing is one of those economic terms that is abstract , so it ’ s difficult to know what it means . Essentially , it ’ s all about manipulating interest rates . Historically , quantitative easing is considered unconventional policy but these days it ’ s becoming more conventional because a growing number of central banks have exhausted their traditional policy toolkits and they ’ re being forced to improvise . The Reserve Bank has just reduced its cash rate target to 0.1 per cent , which is the lowest in history — so it ’ s running out of traditional ammunition to fire up the wider economy . That ’ s why it ’ s decided to dramatically increase its purchases of Australian government bonds . A government bond is a “ debt security ” that guarantees regular interest payments ( say , every six months ) from the government to whoever buys them , which continue for the life of the bond . The biggest consumer facing issue right now in mortgage lending circles is that the banks have not passed on the rate cut to their customers on variable
“ Given the real estate sector is naturally focused on our homes , demand has certainly outstripping supply right now .”
The federal government is adding as much stimulus into the economy right now as it can by way of the bond program , tax cuts , JobKeeper and JobSeeker payments , JobMaker incentives plus the first home builder inducements . With restrictions lifting in all states it ’ s full steam ahead , except for the many hard border closures which remain in place , courtesy of the state governments . COVID-19 has certainly allowed many people to re-evaluate their life and lifestyle this year . Many of our regional and lifestyle markets are experiencing unprecedented buyer demand . This year has pulled forward a lot of homebased conveniences like - dining at home , the rise of streaming services and cloud based computing . Given the real estate sector is naturally focused on our homes , demand is certainly outstripping supply right now .
Given the favourable macroeconomic landscape , we have just booked our strongest month of sales ever in our 118 year history with $ 5.71 billion in transactions , up 30 per cent year on year . Looking at our results for the past month , the number of new listings during the past 28 days is down 3.43 per cent on last year . While the number of sales continues to surge forward in comparison
4 The information is general information only , not financial advice , and does not take into account your individual objectives , financial situation or needs .