Interest rate rise signals improving economy
The Melbourne Cup rate rise, which brings the RBA cash rate to 3.5%, is a good indication that property and the large economy are well and truly on the rise too. Of course there will be a few people who think this is the doomsday calling for what the property markets have done since October 2008, but we think it is the perfect sign for buying more property. If you were too scared to get into property back in October when the start of the increased first home buyers' grant begun, then there must be enough signs and confidence by now...
We are looking at a sustained rally in house prices across the board for the remainder of 2009 and 2010, after that nobody really knows. The RBA is raising the cash rate one quarter of a percentage point each time so as not to upset the apple cart. This will lead to banks' raising rates at a gradual pace meaning rates will stay below average until at least the end of next year.
If this isn't a good time to buy then when is???