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Window of opportunity

THE next six months will provide a “golden window” of opportunity in the housing cycle for WA home investors, according to Investor Club branch manager Barry Atkins.

Mr Atkins said WA was now entering a cycle of falling interest rates, which he expected would take six months to have a significant impact on the economy and the housing market because of the lag effect.

“This means that the housing market in WA will not fully recover from the current downturn until at least the second half of 2001 if there are substantial interest rate cuts now,” Mr Atkins said.

“For investors in the housing market, this creates an optimum time in the interest rate cycle to purchase a new property.

“With interest rates falling, they have the capacity to borrow more money at lower rates. At the same time, house prices remain competitive because buyers will not fully enter the market until economic confidence begins to return, which takes at least six months.

“The new home and apartments market is where the more astute investors will target during the golden window of opportunity because the current downturn in the housing market has been more severe in the new home building sector compared to the established home market.

“Overall, established home prices have remained stable on a smaller turnover. In contrast, new home sales have fallen by over 40 per cent.”

Figures released by the Australian Bureau of Statistics last week indicate the new home building sector is already on the road to recovery.

According to the ABS, there was a 4.5 per cent monthly increase nationally in the number of new home building approvals in December – although still 34.4 per cent down on December 1999.

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