Aussie economists, investors and policy makers are watching closely to see where this latest wild ride in the Trump presidency will take us.
Earlier this month, Aussie Treasurer Jim Chalmers touted one response to the tariffs that could be good news for property owners, reports realestate.com.au.
“The next Reserve Bank interest rate cut in May might be as big as 50 basis points,” he said.
The big banks are tipping four cash rate cuts this year and if that happens. That’s the equivalent of $5,000 back in your pocket, based on a national average loan size of $665,000.
Those with a mortgage of $1 million would get a cool $7,600 back it their pocket. That’s enough for a family holiday (or a few cartons of eggs the way prices are headed!).
A secondary benefit for property owners is the potential for further capital gains as rate cuts tend to stimulate property price growth.
“Australian housing markets are very sensitive to rate changes, especially rate cuts,” My Housing Market economist Andrew Wilson told realestate.com.au.
“Historically prices go up following interest rate cuts, even during times of great uncertainty, because issues of sentiment can (wane) when the realities of improved affordability hit.”
So if property owners are watching their super or shares take a dive, then a bigger dive, then a rise, hold on, because you could see a property upside from rate cuts as the wild ride continues.
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