Spring is here, a time of year when the real estate market traditionally heats up along with the weather.

Two interest rate cuts by the Reserve Bank during the winter months seem to be having an effect on the market already. CoreLogic data shows that combined house prices in Australia’s five largest capital cities (Sydney, Melbourne, Brisbane, Perth and Adelaide) have increased by 0.75% over the last three months. Many analysts are tipping interest rates to fall even further before the end of the year.

The low interest rate environment and increasing uncertainty in the share market are combining to make the Australian property sector  more attractive for investors.  Global share markets (including Australia’s) are increasingly being spooked by fears of a major economic recession being caused by the escalating trade war between the US and China.

Investors typically turn to the property sector when there is an economic downturn because share prices and dividends tend to fall during that period. In potentially pre-emptive fashion, the value of shares on the Australian share market fell by an average of 6% over the past month after hitting highs of 6,768 on the ASX All Ords, not seen since 2007.

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