Falling interest rates failing to stimulate market

Falling interest rates are failing to have the stimulating effect on the real estate sector that they once did.

Fairfax's property pages report that demand for property is still not as strong as expected, despite the recent drop in the cash rate from the Reserve Bank of Australia.

The current official figure is at three per cent - the lowest since the depths of the global financial crisis.

Chief economist for AMP Capital Investors Shane Oliver told Fairfax there was an expectation the cuts would have seen the property sector improve.

He commented: "Normally this far into an easing cycle things should be running quite a lot stronger than they are.

''Every time interest rates have been cut over the last 20 to 30 years there has been a response in the housing sector. We haven't seen the same response this time."

Chief economist for Australian Property Monitors Andrew Wilson told the publication that buyers are looking for signs of confidence in the marketplace such as strong, prolonged economic growth.

This comes as a number of Gold Coast suburbs were added to the list of RP Data's report on where it is cheaper to buy than rent.

These include Coomera, Helensvale and Merrimac - all areas where on average, those making repayments on principal and interest with variable rates - savings were made of about $255 a year as opposed to renting.