This week’s decision by the Reserve Bank to trim interest rates by 25 basis points will provide some incentives for first home buyers and investors in regional Australia.  It’s great news that many of the banks have taken the decision to pass on the cut in full, and more in some cases. I’d urge those lenders still sitting on the fence to follow suit and pass on the rate cut pronto.

The rate cut is excellent news for regional real estate markets across the country. The rate cut will maintain the rage in our capital cities, and this will wash through to regional markets with robust economic fundamentals.

Across our network, Gary Francis, Sales Manager at Raine & Horne Wellington, says the interest rate cut is expected to attract investor interest to his area, a regional town in New South Wales which benefits from its close proximity to major regional hubs, Dubbo, Mudgee, Parkes and Orange. This interest rate cut will be great for investors seeking decent yields, while it’ll be a boost for local first home buyers. Francis added that NSW first home buyers have been stripped of many of their benefits in recent years, so this rate cut will encourage some to jump off the rental treadmill and into their own homes. Francis said its possible to pay under $250,000 for a quality four bedroom house on decent size blocks in his town.

In regional Queensland, towns such as Toowoomba will boom as a consequence of the cut to official interest rates, and the news that many of the major banks have trimmed their variable rate home loans. Andrew Lynch, Principal of Raine & Horne Toowoomba, said it’s a really good move for his market, which was on the cusp of a surge anyway, thanks to a massive recent infrastructure injection in Toowoomba. 

John De Michele, Principal of Raine & Horne Murray Bridge in South Australia, said values have been a bit flat in Murray Bridge, even though prices have been improving in Adelaide. De Michele expects that investors will start to look at regional towns such as Murray Bridge where the median price is about $250,000 and rental yields above 5% are achievable. Murray Bridge’s diverse economy, which includes irrigated horticulture and dairying, tourism, dry-land farming and intensive animal production, also underpins its vibrant property market.