RBA rate cut 'would make property a more attractive investment'

By Mozo ·

With many pundits suggesting that the Reserve Bank of Australia (RBA) is likely to cut interest rates in the coming months, property is likely to prove an even more attractive investment option, it has been suggested.

Home loans may become more affordable, but property trusts are also likely to garner greater interest, reports the Sydney Morning Herald.

For example, Deutsche Bank recently speculated that Stockland may double its buyback.

"Subject to further asset sales, we would not be surprised to see the buyback expanded to ten per cent of issued capital, given Stockland's relatively strong balance sheet position," it stated.

The RBA is widely tipped to reduce the cash rate in the coming months, with future markets suggesting there is a seven out of ten chance that the first cut will come next month.

At present, the cash rate is still at the 4.75 per cent level set in November 2010 when the RBA announced a 25 basis point reduction.

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