On 7 July 2015, Australia’s Reserve Bank again decided to leave official interest rates unchanged at 2.0%. Great news for home owners who can expect relatively steady interest rates of around 4% for the rest of this year. The last changes were drops of 0.25% on 6 May and 4 Feb this year. Before that the cash rate was steady for 18 months at 2.5%.
Against such a stable and low rate, Australians have taken to investment property in great numbers. The east coast has seen strong demand driving capital growth but much of this was a backlog after basically a decade of stagnant prices. The cities of Melbourne and Sydney have enjoyed significant price rises and now we see this spreading to Brisbane and regional centres like Toowoomba and the Sunshine Coast.
It’s time to enjoy a little smooth sailing but if you’re considering a property purchase, talk to us about the right regions. Previous high gains is not a good reason to buy in those areas. We also recommend borrowers allow for a 3% rate rise in their calculations to allow for future increases. This is $875 per month on a $350,000 interest only loan so it can be a considerable extra expense all responsible investors should allow for.
Thinking of buying an investment property? Talk to us first on 1800 767 332 or see iphq.com.au