On the back of fresh news that Italy has now become the weakest link in the Eurozone debt crisis, stockmarkets around the world were pummelled again last week as about $30 billion was wiped off the value of Australian companies.
Although bad news for many equity investors, it’s good news for the property market with an increased probability that rates will again be cut. This could be as early as next month when the Reserve Bank (RBA) is next due to meet.
The latest Westpac-Melbourne Institute consumer confidence survey conducted after the RBA’s rate cut last week recorded a bounce of 6%, the first time the index has been positive since June. ICAP economist Adam Carr told the Sydney Morning Herald that while home lending is not booming, the fact that it is recovering at a rapid pace despite global turmoil is testament to how resilient the market is.
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