Australian property developer Crown Group says the Reserve Bank’s latest rate cut is welcomed by developers and is seeing a return of confidence among home buyers and property investors.
Chairman and Group CEO Iwan Sunito said he had seen a surge in both confidence and buyer activity in the past two weeks, as a result of the federal election outcome.
This had been further compounded by the Australian Prudential Regulation Authority (APRA)’s recent decision to relax lending restrictions for home buyers, and now, the latest rate cut.
The Reserve Bank cut the official interest rate from 1.5 per cent to a new record low of 1.25 per cent.
Economists believe there are one or two more interest rate cuts ahead this year, possibly as early as next month. The last time the rate was changed was August 2016.
Mr Sunito said that Crown Group had enjoyed a buoyant start to the year, with sales increasing exponentially since January by up to 60 per cent each month.
From January, sales had doubled in a month, then tripled from February to March, then rose another 25 per cent in April.
“Our sales team has been dealing with a huge surge in enquiries as a result of the federal election outcome and the APRA decision in the past two weeks,” he said.
“However, this has been the continuation of a trend that started in the new year as investors in Australia and overseas started returning to the market and looking for new opportunities to buy.
“We are expecting to close another $20 million in sales this week and in the second half of the year, we expect to be very buoyant, with sales at Mastery by Crown Group and Eastlakes Live by Crown Group increasing month on month. Property hunters are out there and they are ready to spend money, they are just choosing the right time – and the timing now is better than ever.”
Mr Sunito said his sales teams were still seeing enormous demand from buyers for the six developments Crown Group has under way or in its pipeline in Sydney, Melbourne and Brisbane.
“We expect to see a surge in buyers making offers in June, July and August, and a huge turnout at our launch in Brisbane’s West End later this year, now that market confidence has returned,” he said.
“This is because fundamentals in the Australian economy are still sound – economic growth is solid, interest rates and inflation are low, unemployment is still low – and as a result any measures that allow finance to be secured more quickly and easily will instil a broader sense of confidence among buyers.”
The good news has also extended to the leasing side of the company, Crown Property Agency.
Crown Group Director of Property Management Anthony Caudullo said the dedicated and experienced leasing team at Crown Property Agency had been inundated with enquiries from its 20,000-strong renter database since it released the first 100 new apartments at Green Square in early May.
“At Infinity by Crown Group we have had 800 enquiries for rentals since we released the first 100 new apartments for lease on 4 May, with 582 people turning up that day to our first open day in Waterloo,” Mr Caudullo said.
“We have since leased 40 of those out and we expect all 100 apartments to be leased out within weeks – which is very unusual.”