Chris Childs

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Property investors may be buoyed by future rate cuts

In spite of what the mainstream media may want you to believe, a steady cash rate isn’t the end of the world when it comes to planning a property investment.Promising gains were made right across the country last year regarding housing affordability – in fact, numbers published recently by the Australian Bureau of Statistics indicate that on average, property prices were 4.8 per cent lower during the fourth quarter of 2011 than they were during the same period in 2010.And although Real Estate of New South Wales chief executive Tim McKibbin said he was surprised that the cash rate was held steady at 4.25 per cent during yesterday’s (February 7) monetary policy committee meeting, there may be further scope for changes to be made later in the year.“I think it is still likely the central bank will cut rates this year,” he said.Residential land sales tend to be an early leading indicator of the property market as a whole, said Housing Industry Association senior economist Andrew Harvey last month.With sales volumes slowly but surely on the rise over three consecutive quarters, this could be an encouraging sign that the property market is gaining momentum.