Market and Interest Movement Update
There was an audible sigh of relief this week when the Reserve Bank opted to leave the Official Cash Rate unchanged at 4.75% in Feb 2011 meeting. The decision was made after the release of tame inflation data and reduced consumer’s confidence after the flood and cyclone Yasi.
Going forward, there remains the possibility that interest rates will increase. Forecasts for the Australia’s economic growth remain strong and the government has recently revised upward the revenue improvements that will flow from the high terms of trade and the export boom that continues to be fuelled by China’s significant growth and demand for our raw materials, particularly coal and iron ore. However, the timeframe for further monetary policy tightening remains clouded.
There are some indications that the tightened monetary policy to date has had a softening effect on domestic demand. Areas of the economy that have slowed as a result of interest rate increases are housing finance and home sales – of which have also seen house price growth slow, building approvals and consumer spending. Given the current acceptable inflation readings and pockets of softness in the economy, it is likely that the Reserve Bank will leave interest rates on hold until its April meeting.
Changes is the one constant in local markets. The Australian property and lending markets continue to be the centre of attention in economic analysis, media headlines.
- Will interest rates rise or stay on hold in the short to long term?
- Is a fixed rate loan now a viable option?
- Where is property prices headed?
- When will we see strong property market results across the country?
While there is an element of uncertainty with many and varied views across the media, there are plenty of opportunities for Australian home owners and those looking to enter the market, either as a first home buyer or investor.
The Reserve Bank held interest rates steady this month and many predictions are that rates will stay at their current level for the next few months. However, banks are stating they are facing rising cost of accessing funds internationally and the possible need to change rates outside of any decisions by the RBA.
Fixed rate home loans are now back on the radar for many home-owners, with several lenders having dropped their fixed rates in recent weeks. Capital Wealth Finance have 2 years fixed at 6.89% -full doc only, which is attractive for those with new or existing mortgages. For the past 2 -3 years due to Global Financial Crisis (GFC), the market is dominant by the Big 4 lenders. However, competition in the lending market is now starting to hot up, with more specials and discounts on offer. Non-bank lenders and smaller lenders are starting to re-assert themselves in the market. Property prices, after a surge over the past year (some of it due to the ‘pull forward’ effect of the boosted grants for first home-buyers), have flattened somewhat in the past couple of months. This has opened the door for first home buyers and astute investors who recognise that this presents ideal buying conditions.
The arrival of a new year before the financial year 2011 ends, there could be significant activity in the property market. So what does this mean for you as a home-owner, property investor or potential property purchaser? It means there are many factors to consider so to ensure the quality decision you make today can set you on the right path for many years to come. You should never take a ‘one size fits all’ to your financial situation as the home loan and property purchasing decisions of your work colleague, neighbour or brother-in-law may not suit you. Quality advice, relevant to your personal situation, has never been more important. That’s why Capital Wealth Finance is tailoring financial solutions based on your needs analysis to ensure your decision making is of quality and can stand the test of time.
Going forward, there remains the possibility that interest rates will increase. Forecasts for the Australia’s economic growth remain strong and the government has recently revised upward the revenue improvements that will flow from the high terms of trade and the export boom that continues to be fuelled by China’s significant growth and demand for our raw materials, particularly coal and iron ore. However, the timeframe for further monetary policy tightening remains clouded.
There are some indications that the tightened monetary policy to date has had a softening effect on domestic demand. Areas of the economy that have slowed as a result of interest rate increases are housing finance and home sales – of which have also seen house price growth slow, building approvals and consumer spending. Given the current acceptable inflation readings and pockets of softness in the economy, it is likely that the Reserve Bank will leave interest rates on hold until its April meeting.
Changes is the one constant in local markets. The Australian property and lending markets continue to be the centre of attention in economic analysis, media headlines.
- Will interest rates rise or stay on hold in the short to long term?
- Is a fixed rate loan now a viable option?
- Where is property prices headed?
- When will we see strong property market results across the country?
While there is an element of uncertainty with many and varied views across the media, there are plenty of opportunities for Australian home owners and those looking to enter the market, either as a first home buyer or investor.
The Reserve Bank held interest rates steady this month and many predictions are that rates will stay at their current level for the next few months. However, banks are stating they are facing rising cost of accessing funds internationally and the possible need to change rates outside of any decisions by the RBA.
Fixed rate home loans are now back on the radar for many home-owners, with several lenders having dropped their fixed rates in recent weeks. Capital Wealth Finance have 2 years fixed at 6.89% -full doc only, which is attractive for those with new or existing mortgages. For the past 2 -3 years due to Global Financial Crisis (GFC), the market is dominant by the Big 4 lenders. However, competition in the lending market is now starting to hot up, with more specials and discounts on offer. Non-bank lenders and smaller lenders are starting to re-assert themselves in the market. Property prices, after a surge over the past year (some of it due to the ‘pull forward’ effect of the boosted grants for first home-buyers), have flattened somewhat in the past couple of months. This has opened the door for first home buyers and astute investors who recognise that this presents ideal buying conditions.
The arrival of a new year before the financial year 2011 ends, there could be significant activity in the property market. So what does this mean for you as a home-owner, property investor or potential property purchaser? It means there are many factors to consider so to ensure the quality decision you make today can set you on the right path for many years to come. You should never take a ‘one size fits all’ to your financial situation as the home loan and property purchasing decisions of your work colleague, neighbour or brother-in-law may not suit you. Quality advice, relevant to your personal situation, has never been more important. That’s why Capital Wealth Finance is tailoring financial solutions based on your needs analysis to ensure your decision making is of quality and can stand the test of time.
Comments
Post a Comment