Developers must pass on rate cut to home buyers
As developers it’s our duty to play our part in Victoria’s economic rebuilding, and restoring affordability for home owners is the first step in this process.
The affordability equation will now be further assisted by the RBA dropping interest rates by 0.25%. The average household will save just under $50 a month on a $300,000 mortgage.
Melbourne’s recent property price correction of roughly 5% to 10% helps restore affordability, coupled with yesterday’s interest rate drop, which is equivalent to about a 4% drop in monthly mortgage repayments.
It’s now the responsibility of Melbourne’s developers to maintain this affordability and use the rate drop to further improve economic confidence and restore a healthy demand for housing, rather than use it as a chance to push prices up once again.
We’ve seen from experience that once new land allotments reach that $200,000 price bracket, it breaks through the barrier of what the average consumer deems affordable.
Rory Costelloe is executive director of Villawood Properties, a Melbourne-based developer that controls a land-bank of over 16,000 allotments across the eastern seaboard of Australia.
