RBA cash rate is expected to remain steady in the medium term at 2.5%. It is predicted that for the first time since 2004, interest rates will not move for a 12 month period.
The futures market is not expecting an increase in the cash rate until February 2015 and there is an expectation of an increase which may be as high as 4.25% sometime in 2015 although another smaller school of economists are holding out for a rate cut later this year. With fixed rate home loans below 5% and competition rising in this market, some are choosing to fix part or all of their loans.
The result of these lowest interest rates is that finding an investment property that provides a rental return greater than the cost of the interest is a lot easier! Whilst unemployment remains low, slow wage growth, variable and fixed rates are at record lows, rental yields are high and property prices are stable. All this still makes for a wonderful time to invest in the property market.
Infinity Property Agents – Sydney