Rate change, meh…

Interest rate changes no longer have an impact on buyer decisions. That’s the underlying theme being expressed by a number of commentators after yesterday’s RBA surprise slashing by 0.5 points. Commsec analyst Craig James pointed out “we do know that there’s plenty of bargains out there for cashed-up buyers. But the missing ingredient is basically confidence”. Even industry veteran John McGrath sneses we have left the traditional interest rate link to buyer activity in the past. Increasingly buyer activity has become subject to a larger group of global influences which gives reason for us to reflect on the theory of compressed market shifts. Given the uncertainty of Europe, most recently Spain’s difficulties, and the disjointed recovery in the U.S. as they head into an election period culminating in our own fractured domestic political landscape all of which form part of the daily soup served up to home buyers, is it any wonder there is reason for a lack of confidence in the market? That being the case, what will it take to restore security to buyer perception? Welcome to the “NEW” normal.

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