Should you expect even lower interest rates?
When you’re in the market for investment property in Queensland, interest rates will weigh heavily on the mind. Unless you’re looking to buy right now, that is! As the Reserve Bank of Australia’s (RBA) board has decided to hold the cash rate steady at 2 per cent for yet another month, many Australians will be enjoying great conditions for property investment, thanks to interest rates that are, in some cases, at 50-year lows.
But will they go down even further? If this was to happen, purchasing new real estate to build wealth could be made even more financially simple. So will it actually happen? And why?
The cash rate is keeping growth moving
In the release from RBA Governor Glenn Stevens on the cash rate, he said that low interest rates were helping to keep borrowing and spending strong across Australia. When it comes to housing, this activity has remained healthy across the board for some time now.
While he did note that there are some risks in the housing market, the fact that no action has been taken suggests that if it ain’t broke, don’t fix it. What we mean by that is, conditions are still good for smooth sailing on the property investment market – maybe it’s time you dipped your toes in?
Debate rages about further cuts
The Housing Industry Association’s chief economist Harley Dale was someone that expected the cash rate to remain the same this month, but he thinks there’s more wiggle room in the figure.
Dr Dale expects there will be continued debate about whether the RBA has more cash rate cuts up its sleeve, which could boost housing activity even further – perhaps with you involved. Construction of new homes has been hitting fantastic highs, and any further cash rate reduction could mean you secure a home loan at an even more inviting fixed rate than is currently available.
The sun is still shining
Even if there isn’t another cut to the cash rate, it looks like the 2 per cent figure is here to stay for a while yet. This gives you easy access to the capital gains that can be generated through property investment, so anyone with the capital could be ready to buy.
However, just because the conditions are great doesn’t mean you should jump in and purchase at the first opportunity. Buying a property on low interest rates is still the biggest purchase you’re likely to ever make, so make sure you do it right. With the appropriate investment guidance and wealth coaching, you can move forward with confidence.