Tuesday’s rate cut continued the recent run of good news for a property industry already boosted by the Coalition’s return to power and a loosening by the banking regulator of mortgage serviceability requirements.”It’s the third measure in the same number of weeks providing a much-needed boost to the housing market and the broader economy,” said Mark Steinert, the chief executive of Stockland, the country’s largest listed developer.
The cut in the benchmark lending rate to 1.25 per cent, the lowest-ever level, followed the Coalition’s re-election last month that killed the prospect of Labor’s changes to the negative gearing and capital gains tax breaks and promised a new federal first home buyers deposit scheme, as well as the relaxation of mortgage serviceability requirements by the Australian Prudential Regulatory Authority.
For Stockland, which makes one-third of its profit from housing, cheaper borrowing costs were a welcome prospect, but not the only thing a housing recovery would rely upon.
“We’ve seen a 30 per cent-plus increase in inquiry levels in Sydney and Melbourne on the two weekends since the federal election,” Mr Steinert said.
“We have to see how that translates into contracts, deposits taken and ultimately settlements. Ultimately, the extent of the improvement in the market will come down to credit availability. That’s where the APRA measure is so important.”