Real Estate Institute NSW - Orana Division chairman Rod Crowfoot said a drop in interest rates may give homeowners the confidence to enter the market as vendors.

The Reserve Bank of Australia (RBA) is widely tipped to cut rates by as much as half a percentage point when it meets today.

Dubbo is experiencing its lowest stock levels - or homes on the market - for at least six or seven years, Mr Crowfoot said.

For homeowners who are sure, who are hedging their bets, an interest rate cut could give them comfort, he said.

“They may look at putting their house on the market,” he said.

“It would be a stimulus to the market as far as listing goes which is what we’re crying out for.”

An interest rate cut could allow spring to live up to its reputation as “the busiest time of the selling season”.

“If banks do reduce their rates, it will probably make first homebuyers and investors more comfortable to buy,” Mr Crowfoot said.

Mr Crowfoot said he did not predict a dramatic change to interest rates.

The US financial turmoil was likely to make a bigger difference to the commercial and industrial sector, rather than the residential sector, he said.

Mr Crowfoot thought that banks that didn’t match any RBA rate drop were “hedging their bets” against the global economy.

“There will be some reduction to show some goodwill,” he said.

“It’s disappointing given their reported million and billion dollar profits.”

faye.wheeler@ruralpress.com