From Deb’s desk
A confluence of events on the political and financial fronts has created one of the best set of buying conditions that I can remember in my time as an agent.
The Federal election result cleared away uncertainties across a range of investment platforms. Negative gearing stays and the lesson from the election is it will be a brave political party that tries to unpick it in the future.
This should give tremendous confidence to anyone thinking of investing in property long term given the historically strong returns over the journey.
On June 4 the RBA cut the cash rate by 25 basis points taking it to a new low of 1.25 per cent. But the Reserve wasn’t satisfied and had another go on July 2 bringing the new base rate to just 1 per cent.
Naturally, home loan rate cuts have followed with I suspect more to come when the Reserve has another look as early as next month.
With interest rates still falling and prices at pre-boom levels in some cases, I can’t think of when there have been better buying conditions for quality property in the last 20 years.
A lot of the Reserve’s actions are aimed at Sydney and Melbourne where the property bubble has burst and general economic conditions are flat, although there were some encouraging signs this week that the East coast market was in recovery with house prices edging up.
In WA, however, the economy has quickly regained ground lost when the iron ore price collapsed in 2016. The State Budget is back in surplus and employment is picking up in the mining sector and we have seen in the recent past how quickly that flows through to the whole community.
Of course. when conditions look really good for buyers, the laws of economics dictate that those conditions aren’t so good for sellers, so stock starts to become scarce as sellers stay out of the market.
Swanbourne currently has 18 properties available for rent and 40 properties for sale. That’s tight for a high demand market. Cottesloe has 66 properties available for rent and 81 properties for sale.
But one thing I have learned about real estate is that decisions on buying and selling are made for all kinds of reasons and money is quite often the least of them.
Downsizing is, of course, one of the major reasons why people of the baby boomer generation are swapping the family home for an apartment at Leighton or McCabe Street, Claremont or Swanbourne.
No garden to worry about. Lock up and go.
In other economic news: