Urban Land and Housing – Interest Rate Cuts Predicted – May/June predicted to be big months

Interest rate cuts on the horizon. Not suprising and will certainly fuel some more action in the land sales market. Predicting May and June to be pretty big months in terms of land sales due to:

– Interest rate cuts
– Stamp duty exemption to run out June 30
– Builders talking of price rises due to Carbon Tax
– Lack of supply generally
– Delayed settlement for many releases (i.e. lock in now and pay later)

Essentially this cocktail of factors will drive urgency.

Note extract from the NAB Australian Markets weekly

“Interest Rate Strategy: The lower than expected CPI number means inflation is no longer seen as a restraint on policy. In addition to a 25bps cut this week, NAB economists expect the RBA to follow with another 25bps in June.
The current market environment remains very attractive for borrowers paying fixed , particularly at the short end of the swap curve. As global uncertainty looks unlikely to dissipate any time soon, domestic yields are inclined to remain low over the near term”