Rates have been cut because growth is slow and indicators suggest little upside

We have spoken about a balance of factors impacting property for some time. 

The rate cut reinforces those factors. 

Rates are down which means returns on cash and related investments is low.

This will keep high yielding assets on the radar of fund managers. 

However, rates have been cut because growth is slow and indicators suggest little upside. 

That mix means that investors will still be cautious, particularly in relation to secondary assets.   

A key issue is the lack of appetite and capacity to borrow, particularly amongst the consumer sector, the back bone of growth in the economy.  

A sluggish labour market and income growth keeps a broader cap on growth.   

We do expect growth to respond to both lower rates and the weaker AUD, although this will represent a slow improvement rather than a sharp uplift and is unlikely to be an instilled trajectory until later in 2014.