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First-home buyers 'are responding to easing'

The RBA's decision to cut interest rates has encouraged first-home buyers, according to an analyst.

First-home buyers in the Australian property market are responding well to the Reserve Bank of Australia's (RBA's) decision to cut rates, according to an analyst.

 

 

James McIntyre, Sydney-based economist at Commonwealth Bank of Australia, told Bloomberg he expects another 25 basis-point cut to rates in February 2012.

 

 

He added that luxury home investment remains low, with conditions in that market less sensitive to the RBA's cuts.

 

 

Responding to research from RP Data that shows an overall drop in home prices over the year, Mr McIntyre suggested the European sovereign debt crisis is playing some part in the property market.

 

 

"The nature of the transmission of the eurozone crisis is that it's coming through financial flows into the Australian economy rather than through real economic impacts,” he said.

 

 

First-home buyers are also influenced by the end of stamp duty concession, according to Wayne Stewart from the Real Estate Institute of New South Wales.

 

 

He told ABC News buyers felt under pressure to beat the January deadline.

 

 

Posted by Steve Douglas

- property, first, grant, RBA, rates, interest

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