The latest cash rate outlook from St George Bank indicates a slow rise in the Reserve Banks Of Australia’s Cash Rate from 3.75% in February 2010 to an expected Cash rate of 4.25% by December 2010.
So what does this mean for consumers?
A Cash Rate of 4.25% would see interest rates return to pre financial crisis levels of the average consumer home loan lending rates of approximately 7.75% p.a. Which means property investors need to take this into consideration when if they plan on buying a property in the next couple of months.
What does this mean for property investors?
As interest rates rise it means first home buyers generally move out of the market as the cost of servicing a home loan increases and housing affordability decreases. The St George Bank Cash Rate prediction is supported by a number of other lenders including Westpac – who predict a Cash Rate of 4.75% and JP Morgan who predict a Cash Rate of 5%. (ABC Lateline. Business 3 February 2010).
We Find Houses Managing Director Paul Wilson says, “The forecast for the interest rates is a sign the Australian economy is strengthening and the economy is returning to pre financial crisis levels, where consumer and business confidence were positive. “
“There are some great investment properties now available in the current market as property prices grow. And as we reported last week (Click property investment Australia to read this article) some regional centres have recently been identified as particular hot spots, because of new spending on infrastructure and private investment.”
We Find Houses is a national company providing personalised services to property investors and homebuyers. To contact We Find Houses click Property investment company to email us or call 1800 600 890.