Consumers look to property as rates fall

12 Jun 2012, 12:39 pm   -   Source: AAP
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Only five per cent of the 786 people surveyed had no plans to buy property, while seven per cent said they would rather buy shares, the poll published on Tuesday showed. (AAP)

Only five per cent of the 786 people surveyed had no plans to buy property, while seven per cent said they would rather buy shares, the poll published on Tuesday showed. (AAP)

The recent spate of interest rate cuts has inspired a new hunger to invest in the property market, a survey has found.

Two consecutive months of interest rate cuts have inspired borrowers to consider investments in the property market, a new survey has found.

An online poll by mortgage provider Loan Market found 51 per cent of respondents were planning to invest over the next 12 months, while a further 37 per cent were keen but want to be sure their jobs were secure.

Only five per cent of the 786 people surveyed had no plans to buy property, while seven per cent said they would rather buy shares, the poll published on Tuesday showed.

Loan Market corporate spokesman Paul Smith said 75 basis points worth of official interest rate cuts by the Reserve Bank of Australia (RBA) over May and June had helped restore confidence.

Now at 3.5 per cent, the cash rate is just above the three per cent emergency level seen during the 2008-2009 global financial crisis, leading some variable interest rates to fall below six per cent.

Mr Smith said concerns about the European debt situation and the economic slowdown in China meant the RBA could lower the cash rate again over the next few months.

"The big positive for consumers who have been wary of economic conditions and dealing with cost of living increases is that they don't need to be concerned about interest rates rising any time soon," Mr Smith said.

Money markets are factoring in an 80 per cent chance of a cut in the cash rate to 3.25 per cent when the RBA board next meets in July.

RBA governor Glenn Stevens warned last week he had no intention of encouraging a return to the spiralling property prices and household debt levels.

Another mortgage broker, 1300HomeLoan, has predicted a resurgence in parent equity home loans as South Australian, NSW, Victorian and ACT government subsidies for young homebuyers draw to a close at the end of the financial year.

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Your Comments

Biased view

Grant - from Sydney, 11 months ago

Any poll undertaken by a mortgage company will be biased in favour of the property market. Anyone associated with the real estate industry will always say "house prices are about to surge" and "now is the best time to buy". Statistics from independent sources are less biased.

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