PROPERTY guru John McGrath is feeling rather positive about the real estate market in 2012 as two interest rate cuts, and potential for more combine to give it a push.
“I’m feeling optimistic about the Australian property market … we’re not in for any major growth in prices but there a are positive signs ahead,” he writes in the latest edition of Switzer Broker.
He said the Reserve Bank’s decision to cut official interest rates in November and December has boosted property buyers confidence heading into the new year.
“Two interest rate cuts will always stimulate the more affordable end of the market – which is a positive thing for the bulk of the population living in and buying homes under $1.5 million to $2 million.
“It’s funny what a shift in confidence can do for the property market. Two rate cuts is a big shot in the arm for people who perhaps delayed buying in 2011because they were fearful of cost of living pressures and major economic concerns overseas.”
He said while the sub-$2million market had the “lion share” of the interest, he believes this will continue until there is a resolution to the debt crisis in Europe.
“Banking and finance executives aren’t getting the bonuses they used to and this is having a direct effect on property above $3 million,” he said.
“The share market is also very volatile, also due to Europe, so resolving this large-scale economic issue is critical for property prices in Australia.”