The Reserve Bank of Australia has pointed to the fact that the low interest rates for home loans will continue throughout 2014, which is welcome news for many home owners.
Head of Harcourts for South Australia Greg Moulton says that the indication from the Reserve Bank governor Glenn Stevens that the low cash rate is unlikely to change any time soon, will result in buoyant real estate sa for 2014. "Maintaining the official cash rate at 2.5% is excellent news for stockholders, house owners and first house purchasers of property SA," says Mr Moulton.
Moulton continues, "A low official cash rate and relative equilibrium in rates enables everyone to plan in advance and gives certainty to real estate sa decisions."Moulton goes on to say that a period of steadiness for 2014 will be a boost for consumer confidence, particularly where South Australia real estate has not been performing so strongly, and stability will keep up the momentum in other property SA markets that are already performing well. The governor of the Reserve Bank has to act in the best interest of the Australian economy and by leaving the official cash rate unchanged, the Reserve Bank is providing confidence to real estate sa in the short to medium term.
Moulton claims that by suggesting that interest rates will remain low through 2014 also shows the Reserve Bank is supporting solid activity in South Australia, "The SA market is intrinsically connected to the local South Australian economy, and particularly the Adelaide economy, due to small business owners drawing down on capital gain from their home and re-investing it into their business. "
The challenge for the Reserve Bank is to balance the good health of the economy with first house buyers who are attempting to get a foot in the door of property. Moulton points towards new statistics out showing that first house purchasers make up just 9.9% of all mortgages issued in February and asserts that first home purchasers of property sa are still much on the boundary of the property market, "First house buyers of real-estate are actually having to make some compromises or come up with some cutting edge methods to access capital. "
Moulton claims the stories for first house buyers in Adelaide is that price is a controversy all over Australia, he says that the other side of the coin for first home buyers of real estate in South Australia is that once they've got a foot in the door of the property market, then they are going to be pleased with property price growth.
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