Westpac says low rates will boost property market

With interest rates tipped to remain at historic lows over the next two years, borrowers are expected to be lured back into the Australian property market, according to Westpac chief economist Bill Evans.

“The market [is] expecting rates to go lower, but it's also expecting that these very low rates will be sustained for an extended period,” he said.

“Can you imagine what might happen to the Australian economy if we have two years or so where the cash rate is 2.25 per cent? I for one think that I'll be going out and buying some Sydney property.”

Sally Auld, JPMorgan's fixed-income strategist, said money markets were pricing in a lower cash rate for the next few years.

Source: Sydney Morning Herald