30 Apr 2012

Noosa and the rest of the world….

We are all expecting an interest rate drop next week.   It seems that the forecast of the Reserve Bank last year for our growth rate at 4.25% was about 2% too high.   Thus, it appears that we have been caught with a cash rate that is way too high.   I wouldn’t be surprised to see .5% drop next week or at least it trending down over the next 3 months.

Does this have an effect on real estate?  You bet.   Even at the top end?  You bet.  Affordability is, of course, vital when investing in real estate but the most important ingredient appears to be confidence.   It doesn’t matter what market it is, share, real estate or even our local fruit market… when there is a glut of product and sales are few – it is cheap.  When everybody wants some, prices have to increase.

I think it is interesting that America could well be the world’s saviour.   This week’s figures from America showed retail sales are growing there and car sales are booming. See?  Confidence.  This of course increases employment and more people with jobs means more spending and so it goes on.   The Australian budget next week could be a shocker of course…. but commentators seem to think it’s only a short term one as the existing Government will be gone by next year.

Does all this affect Noosa property?  Yes…. and no.   Yes – people are still cautious but a little less so.  And no, because when people come across paradise and it is available in limited quantities – they buy.   There have been a good number of sold stickers plastered over sales boards this week.

The weather is getting cooler.  Frau (my trusted Schnauzer) has decided a 5.30am wake-up call is just plain dumb and to give her a nudge out of bed when I return from my run.  So much for a woman’s best friend….

Until next time.


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