WILL THE SECOND .25% INTEREST DEDUCTION REVIVE THE SALES MARKET?

WILL THE SECOND .25% INTEREST DEDUCTION REVIVE THE SALES MARKET?

7.12.11

The simple answer is no.

The current low demand from homebuyers compared to sellers is attributable more to a lack of confidence than the rate of interest.

Buyers fall for the trap of trying to pick the bottom of the market and they will fail, but it will not stop them trying.

The one area where the drop in interest rates may affect buyers is with investors.

We have only 2 properties vacant in our rent roll of over 500 managements which makes the vacancy factor less than .4%.

REIWA’s vacancy factor is 2.4% (average is 3-3.5%).

According to the forecasters that should lead to higher rents being charged next year, increasing returns.

We already have property with gross rentals above 5%, which is the level at which investors have bought in previous years.

So watch this space.

Ross Cutten

Owner / Director

Noble Real Estate