Confidence returns as interest rates drop

When the Reserve Bank of Australia first cut interest rates by 25 basis points in February, founder and managing director of Meriton, Harry Triguboff, predicted it would be the first rate cut of many. The market was sceptical. The biggest apartment builder in the country was on the mark.

Most would say it is too early to call how the 25-basis-point rate cut announced yesterday is affecting the market, but most are not the Meriton boss and most would not have access to the immediate market changes.

Volume speaks volumes and the biggest apartment owner in the country can already see where the market is headed.

“The RBA economists expect inflation reduction to be sustained so there is no reason for interest rates to remain high,” Mr Triguboff said.

“With each rate cut comes more confidence, and now, as our own statistics show, is a great time to buy.

“Literally, overnight, I can see the tide changing.  Meriton is its own research instrument and we can draw on our own figures to assess the market.

“From 2.30pm yesterday afternoon, after the rate cut announcement by the RBA, Meriton buyers who were sitting on the fence – committed.

“Our enquiry levels increased almost immediately and with that, our vendor finance enquiries also increased.

“Even with the interest rates coming down, the banks are still cautious with their lending practices so Meriton Finance is a first stop shop for many homebuyers and investors.

“I’m not so cautious. I am very confident about which way the market is headed.

“It is very good to see first home-buyers and first-time investors coming into the market – and so quickly. It would be good to see the banks loaning more money on the back of these rate drops.

“If I can give buyers a leg-up until the banks are more willing to loan them money, then I can continue to do that.

“If the interest rates continue to fall, which seems likely, prices will go up making now the right time to buy in,” he says.