Unique circumstances for Adelaide property buyers

The Reserve announced it will cut its official cash rate by 1 percentage point to 3.25 per cent, effective 3/02/09. In practical terms for homebuyers, financial institutions that commit to passing on the cut in full, effectively offer a standard variable rate of 5.91%
For a family with a $400,000 loan, Tuesday's rate cut, if passed on in full, represents a monthly saving of $248. In addition to the savings from last year's rate cuts of 3 percentage points, (banks passed on about 2.78 percentage points) the total saving for a family with a $400,000 loan is $990 a month.
Buyer's general caution in the real estate market has resulted in a choice of property available and some quality properties scattered amongst the non performers. Rental demand is strong and strengthening.
Investors are back into the 5-6% yield and the first home buyers are being offered the equivalent to their deposit,stamp duty and money to spare. The government has released its $42B economic stimulus package. Fuel prices are down.
These circumstances were completely unexpected and are unlikely to stack up this way again in our lifetimes. Individuals and society learn from their mistakes. The upside of this is that investors have the opportunity to safety and strategically build their portfolio while first home buyers can confidently get their foot in the door. This "perfect storm" cannot last forever, but while the circumstances are such, purchasing real estate in the resilient Adelaide property market is one of the strongest investments available.


If you are looking for a well performing residential or commercial investment property, an addition to your existing property portfolio or a home to live in, We guarantee to save you money on your next real estate purchase. Go to or call the team on +61 8 84631997

Lowest Australian interest rates since 1964

With the RBA slashing rates by 1% to 4.25% today, the housing market is poised for a significant increase in activity amid improving buying conditions and easing affordability constraints.

The extraordinary series of cuts now forecast would take the Reserve Bank cash rate to 2.5 per cent within six months. If the cuts passed through to mortgages, standard variable rates would hit a level not seen since 1964, when they were fixed at that level under the Coalition government of Robert Menzies.
Harley Dale, chief economist with the Housing Industry Association, said there are already some tentative signs that inquiries from investors are starting to pick up. "I think many are looking at their sums and are realising that with the amount of interest rate cuts and what remains a very tight rental market where yields are still climbing, it is now a good time to buy. Despite not getting the growth in asset at the moment, it's actually a good time to be investing in property particularly with what's happening with the share markets."
Tim Lawless, national research director with RP Data, said the rate cut would see further activity in the lower end of the market. "We do expect the markets that are likely to respond to the interest rate cut are the ones in the lower price segments because there has been a lot of pent-up demand building for these types of properties from first homebuyers and lower income families over the past few years. They are the markets that are becoming more active now and probably the ones that will respond first to further falls in interest rates."
However, Lawless said buyers are likely to remain very cautious as uncertainties over jobs continue to dominate.
"I don't think we're going to see a sudden increase in buying activity as a result of the latest rate cut. We have started to see more people go to open houses and inspections, but we haven't even seen a strong buying behaviour just yet. I think we're going to see the start of a gradual return to the market. It will be quiet over Christmas holidays so it won't be until the first quarter of next year that we're going to see any real signs of increase in sales volume as buying conditions and affordability will continue to improve."

If you are looking for a well performing investment property, an addition to your existing property portfolio or a home to live in, we guarantee to save you money on your next real estate purchase. Go to http://www.directnegotiations.com.au/ , or give us a call on +61 (0)8 84631997