PHOTO: A rate cut is unlikely to fix Perth’s housing market by itself, economists say.ABC News: Gian De Poloni
Even before the board of the Reserve Bank of Australia met today, investors fully expected it to make history by cutting the cash rate to below 1 per cent — the third rate cut this year.
Key points:
- Perth’s population growth is well below the 25-year trend, sparking housing oversupply
- Experts say migration and jobs will do more for the housing market than rate cuts
- But there are positive signs for the state’s economy, as business investment rises
In previous cycles, interest rate cuts have stimulated the housing sector, as lower borrowing costs tempt first-home buyers and investors into the market, with flow-on effects to building approvals over time.
But while house prices in Sydney and Melbourne are rebounding, a different story is unfolding in Perth, where median property values fell another 0.8 per cent last month to $436,008.
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