Mid West property sector buoyed by cut

Geraldton’s struggling property market is set for a boost after the country’s big four banks agreed to pass on some or all of the Reserve Bank’s recent interest rate cut to customers.

On Tuesday, the RBA cut the official cash rate by 25 basis points in a move to stimulate spending across the country after lower-than-expected inflation figures.

While retirees on fixed incomes or relying on savings may suffer, borrowers will benefit from the announcement.

The decision was welcomed by Mid West Chamber of Commerce and Industry acting chief executive Melanie Davies who said the cut would put more money in the hands of Geraldton homeowners.

“Any interest rate cut means there will be additional income in the household so there will be more money for other living expenses,” she said.

“We’re concerned with the business community so the flow on effect is that expenditure will go to local businesses and increase their sales opportunities.

“I think it will also help people when they’re assessing the affordability of house payments and if they’re considering purchasing then this may influence them to make that leap of faith — it’s certainly a good time to buy at the moment.”

Property sales in Geraldton have fallen considerably in the past 12 months with more than 700 properties sold in the year to December 2014, and this number dropped to just 532 in 2015.

Jim Quinn, director of Geraldton Property Team, said he had seen a boost in recent weeks and expects the trend to continue.

“Last month we saw some action, it was a good month for our office — buyers might be realising property prices could have bottomed out and we could be on the way back up,” he said.

“It’s an unusual market where house prices are dropping in both sales and weekly rents. However we are fully confident in Geraldton because there is so much potential in this town.

“The market will always fluctuate and you have to adjust to conditions.”

Representatives from the RBA will arrive in Geraldton next month to meet with local business owners.

Ms Davies said she would like to see the RBA conduct in more consultation with regional Australia.

“There are pockets of economic activity and pockets that are suffering so they need to know what’s going on out here because that’s where a lot of small businesses are.”