Interest Rates : Where To From Here? May 2005 RETURN
Interest rate levels are a huge impact on the property market and we have discussed this very subject in detail on many occasions. Whilst we have had enjoyed the lowest rate environment in 30 years the general public is being lead to think huge rate hikes are pending. This is the Reserve Bank of Australia putting a psychological barrier to both the property market and consumer spending. It is well documented that over the last 2 years we have had press release after press release of possible increases yet the threats have amounted to only a negligible change in the cost of money. Future trends in rates are more reliably judged by the short to medium fixed term rates. It is very interesting to note the 5 year mortgage rate has just been reduced to 6.85%, lower than some of the current variable rates on offer. This certainly does not reflect an impending doom, rather that stable conditions will prevail and at most attractive rates. I am sure those who remember the rates of over 20% in the 1990’s would attest to current affordability. Now that the property market is now more sensible and one can acquire quality property at realistic levels, we can’t think of better times to increase your property holdings.
Interest rate levels are a huge impact on the property market and we have discussed this very subject in detail on many occasions. Whilst we have had enjoyed the lowest rate environment in 30 years the general public is being lead to think huge rate hikes are pending. This is the Reserve Bank of Australia putting a psychological barrier to both the property market and consumer spending. It is well documented that over the last 2 years we have had press release after press release of possible increases yet the threats have amounted to only a negligible change in the cost of money. Future trends in rates are more reliably judged by the short to medium fixed term rates. It is very interesting to note the 5 year mortgage rate has just been reduced to 6.85%, lower than some of the current variable rates on offer. This certainly does not reflect an impending doom, rather that stable conditions will prevail and at most attractive rates. I am sure those who remember the rates of over 20% in the 1990’s would attest to current affordability. Now that the property market is now more sensible and one can acquire quality property at realistic levels, we can’t think of better times to increase your property holdings.