02 08 11 | Oliver Hume | Residential
Interest rates hold a boost to new homes market
Interest rates hold a boost to new homes market
Melbourne's largest property marketing company has applauded the Reserve Bank decision to hold interest rates today (Tuesday 2 August) saying it would add confidence in the $4 billion a year Victorian new homes market.
Oliver Hume Director Mr Gerrard Ellis said the new homes market was "on the edge" waiting for a positive signal from the reserve bank that will convert enquiry into sales.
"The decision today will not create a rush of buyers but it will settle the market," he said.
He said display villages and housing estates had reported continued strong enquiry from potential buyers but most were hesitant to commit to a purchase in the face of the continued uncertainty of the interest rate outlook.
The HIA has predicted 48,000 new homes will be built in Victoria in 2011 compared to 70,000 in 2010 - a fall of almost 20%.
"The affordability in the market place is at a critical level with many first home buyers squeezed out. However the second and subsequent buyer market, with greater levels of equity, remains active but they are aware that further interest rate rises will hurt them too," Mr Ellis said.
He said some of the affordability issues were being addressed by builders reducing the price for new homes and some cuts in land prices and land packages from the major builders.
"The supply side of the market has reacted to the rising interest rates by adjusting prices but the immediate future of the housing sector is reliant on confidence that interest rates won't compromise their lifestyle further in the medium term," Mr Ellis said.
Oliver Hume Real Estate Group is the marketing agent behind more than 57,000 residential products along the eastern seaboard of Australia and represents Australia’s leading public and privately listed companies.
Established in 1952, Oliver Hume Real Estate Group is a privately owned real estate company that specialises in the sale and project marketing of residential land subdivisions and medium density and high-rise projects. Over the last 10 years, the group has successfully delivered more than 200 residential projects. It has offices in Victoria, New South Wales and Queensland.
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