An increase in buyer confidence is anticipated by local businesses following the Reserve Bank of Australia’s recent interest rate cut.
The RBA announced a rate cut on Tuesday, February 18, reducing the cash rate by 0.25 per cent bringing it down to 4.1 per cent – the first cut since November 2020.
The cut has been hailed as a financial relief for homebuyers and has sparked a glimmer of hope for local businesses regarding an increase in consumer confidence.
IGA Melton operations manager Jay Morgan welcomed the news but said more needs to be done before people can truly enjoy shopping.
“More work will need to be done for people to be able to pay their home loans. Once they can do that, then we will see more people truly enjoying their shopping,” he said.
Mr Morgan noted that the high interest rates have significantly impacted shopping patterns, with consumers making fewer big purchases.
“Interest rate decision time always leaves us uncertain because of what we’ve had to go through as businesses in the last few years,” he said.
“People are now shopping four or five times a week as a norm with smaller purchases, and we’re seeing that they’re shopping at multiple retailers where they can get the best price and value for money.”
YPA Real Estate director Shane Spiteri said the rate cut would boost buyer confidence.
“The interest rate cuts will give buyers confidence and time to work out their finances, knowing there won’t be another rise for a while,” he said.
“It’s given confidence to people to come out and buy again – especially to buy new homes before the market explodes in the next six to 12 months.
“It has also shown people that the market is safe, giving those everyday people encouragement to get back into the market.”
Mr Spiteri said people have been waiting for an interest rate cut for some time, especially in areas where the housing market is difficult.
“This weekend, we anticipate we will see more buyers out and about. Instead of window shopping, contracts will start to be signed.”
