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Market Update

The Reserve Bank (RBA) decided to cut official interest rates by 25 basis points for the second successive month this week taking the official cash rate to 4.25%. At the time of writing we still didn't know if the rate cuts would be passed on in full by the banks, if they are the standard variable mortgage rate will fall to 7.3% which is around the average level of the past fifteen years.

This week's main Property Pulse article deals with the interest rate cut in more depth. The Australian Bureau of Statistics (ABS) released Gross Domestic Product (GDP) figures for the September Quarter this week. GDP measures the market value of all goods and services produced within an economy over a certain period. In essence, it identifies whether or not an economy has grown or contracted over that period.

Over the September quarter, GDP increased by 1.0% following a 1.4% increase in the June 2011 quarter. Over the past year GDP has increased by 2.5%. Household savings ratios remain at around their highest levels since the mid 1980's with households saving 10.1% of their disposable income up from a downwardly revised 9.1% last quarter.

Disposable incomes are also increasing, up 1.9% over the quarter and 6.0% higher over the year.

Source ... RPData.com.au

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