17th of February 2015
At its meeting on the 3rd of February the RBA Board decided to lower the cash rate by 25 basis points to 2.25 per cent. The official cash rate is the lowest it has been in 40 years in an attempt to strengthen areas within the economy and to tackle the strong dollar which has affected exports and the manufacturing sector.
For the new homes and real estate market this will see a lower borrowing cost to purchasers down to record low levels and an increase in demand for real estate including land and new homes.
With an increased demand for property the price of land in Melbourne has increased in the last 12 months to over $200,000 on average for the first time since 2012 according to research conducted by leading project marketing firm Oliver Hume.
Oliver Hume's National Head of Research, Andrew Perkins, commented that "With the strong Victorian population growth (106,700 compared with a 10 year average of 88,000), a further reduction in the cash rate likely, and a clear disconnect between consumer confidence and project land sales, the fundamentals look sound over the near term".
With record low interest rates and great opportunities available across Melbourne this is an ideal time for those looking to enter the property market. With research suggesting that prices will continue to rise over the short term it's important that potential buyers consider all options available over the next 12-18 months.
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