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The Reserve Bank has slashed interest rates to the lowest level in history to 4.25%. The Reserve Bank cut rates by a full 100 basis points (1%), making property an attractive option for those in search of investment options given the volatility of the stock market.

Australian interest rates have averaged over 8% for the last 59 years and the Bank has signaled that it is serious about avoiding a recession. It is projected that Australia will continue to grow in 2009 and avoid recession, one of the few nations predicted by the Organization for Economic Cooperation and Development (OECD) to perform positively.

The massive rate reduction should give buyer confidence a boost and increase the level of buyer enquiry across all price ranges. We have started to see increased levels of enquiry from the United States with the current exchange rate hovering at $0.65-$0.66 US.

I believe that ex-pats and foreign investors will increasingly recognize the benefits of investing in the Australian property market.

Michael Marquette

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Australia’s economy will avoid a recession next year, helped by lower interest rates, government spending and exports.

A recent Report (Economic Outlook No 84) by the Paris-based Organization for Economic Cooperation and Development (OECD) stated that the Australian economy will grow 1.7 percent in 2009 from 2.5 percent this year, before accelerating to 2.7 percent in 2010, despite the depressed international economic environment, the impact of the financial crisis and the fall in the terms of trade should be relatively contained within Australia.


Furthermore, the OECD expects the Australian unemployment rate will increase to 6% from 4.3% by 2010 but inflation will ease.

The forecast is relatively glowing for Australia when compared to the other major economies of the world, stating that 21 of the 30 member economies of the OECD will go through a protracted recession of a magnitude not seen since the early 1980s.

In recent weeks new property listings have shown a substantial decline and this is likely due to the proximity of the Christmas period. Michael Marquette

FYI: Read related articles on Interest Rates; the Economy; and the Credit Crunch

More information: OECD Economic Outlook No 84

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