Finally the pressures upon Australians will be eased and we have a reason to look positively at the property market in 2008.
As commented yesterday by Simon Turner in his Word on the Street article, The Reserve Bank of Australia at 2.30pm today announced that they would cut interest rates by 0.25% (25 basis points). Their long term view is that inflation will be under control and within its target area by 2010, meaning that the likelihood of a further 0.25% cut next month is good.
The Governor of the Reserve Bank believes that the previous tightening of monetary policy has exerted appropriate pressure on demand and the bank believes that inflation will drop below 3 % by 2010. This bodes very well for those looking to buy and sell property and is the start of what I believe to be a series of interest rates cuts over the next 2 years.
If the banks pass on the interest rate cuts there will be an enormous increase in consumer confidence. Given that long term rates have already been cut by many lenders the news for property is all good.