Spark is back in property market
WHETHER opting for a modest two-bedroom villa or a $1.85 million retreat, buyers are diving head-first back into the property market.
Estate agents have reported strong interest in Northern Rivers property in recent weeks, providing further evidence the Australian economy has left the global financial crisis in its wake.
McGrath Real Estate agents cleared four of eight properties at a recent auction, and one before auction, with properties across the price spectrum snapped up by buyers.
“There’s a strong interest right across the market,” McGrath’s Ballina/Byron Bay principal John Nicolson said.
The sale of a five-bedroom home at Tintenbar for $1.85 million also marked a rebound at the top end of the market, as high income earners shake off the global downturn.
“When the global financial crisis hit it was the top end of the market that was most affected,” Mr Nicolson said.
He said it was the overall state of the economy, and not just movements in interest rates, driving buyers at the high end of the market.
“There’s a perception that the economy is going well,” Mr Nicolson said.
Given the strengthening economy, the Reserve Bank raised its official cash rate to 4 per cent on Tuesday.
Associate Professor Stephen Kelly, head of Southern Cross University’s school of commerce and management, said that below average interest rates were encouraging home buyers to enter the market.
“It (low interest rates) has been the primary driver,” he said.
“People are more bullish about buying property.”
Commenting on the effect of Tuesday’s rate rise, Prof Kelly said the biggest impact on home buyers’ decisions to purchase would come from any future rises.
He said often the expectation rates would increase in the future was more important than how much they had already increased.
The danger of further rate rises came for people who borrowed the maximum possible and left themselves with ‘very little wiggle room’, he said.