April 2020: the emergency rate cut and what it telegraphed
The RBA cut to 0.25% and launched QE for the first time in its history. The signal to property investors was louder than the cut itself.
Rates at the zero bound
On 19 March 2020 the RBA had taken the cash rate to 0.25% and announced a three-year yield target of 0.25%. By April the Term Funding Facility was live, giving banks effectively unlimited cheap funding to lend against housing. JobKeeper had been legislated. The Government had decided, very deliberately, not to let asset prices fall.
The buyer's window
CoreLogic's April index showed Sydney values still rising 0.4% for the month even as clearance rates cratered. The volume collapse was hiding the price story. The smart money used April and May to lock in new-build contracts with developers desperate to keep sites moving — many at 5–8% under list.
Dax Stanley
Founder & Principal Strategist, Hera Property. #1 international bestselling author of Real Estate Investing Using ChatGPT.