This afternoon the RBA delivered its third interest rate cut in four months to take benchmark interest rates to just 0.75% in a collective move that has already sent house prices higher nationally.
Over the quarter to September 30 2019 property data provider CoreLogic is reporting that Sydney and Melbourne house prices increased 3.5% and 3.4% respectively.
Over the month of September they both appreciated 1.7% which on an annualised basis would see property prices in the nation’s two major markets back at record highs this time next year.
CoreLogic also reported that Canberra, Hobart, and Brisbane prices all climbed over the September quarter, with Adelaide, Perth and Darwin marginally lower.
Recent ABS stats showing credit growth to home loan borrowers expanding quickly year-on year also lines up with the data around rising house prices.
While the banking regulator APRA has also moved to loosen lending restrictions placed on banks given the ultra-low benchmark rate environment.
As such all the fundamentals and data point to strengthening housing markets over the short term which is good for residential property focused type businesses such as REA Group Limited (ASX: REA), Domain Holdings Australia Ltd (ASX: DHG) and Mortgage Choice Limited (ASX: MOC).
Home owners are also big winners from the rate cuts with the RBA hoping the extra cash in back pockets will flow through to the wider economy and struggling retailers.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
You can find Tom on Twitter @tommyr345
The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
- On a serendipitous day, Tom Richardson is leaving the building – December 17, 2019 11:55am
- Why Aerometrex shares have doubled their IPO price – December 16, 2019 4:32pm
- Why the National Veterinary Care share price is going nuts today – December 16, 2019 3:39pm