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Inevitable Interest Rate Rise

As the election campaign continues, it’s been a big week of developments. Even though there has been a high degree of inevitability around the interest rate rise for a while now, reality struck this week with the RBA making their long-awaited move.

The media will beat this up and both sides of the election campaign will also try and use this for political leverage. However, the long and the short of it is, rates have been unsustainably low now for far too long. Anyone who has made investments and not budgeted for rates to be significantly higher than current levels in the short term, must have to be kidding themselves. However, the changing dynamics that come with a rate rise will reduce the number of active buyers and raise the number of sellers, stifling anymore capital growth. This is the RBA’s plan and it is needed.

Don’t forget, property values have double over the Last 2 – 3 years. This is also unsustainable. It needs to be rained back in and normalised and the ensuing rate increases will have this effect.

We look forward to moving into a market that is not so frantic and filled with anxiety. However, never forget that real estate is and always will be, a sensational investment choice.

Wherever you may be on your property journey, we’re here to help.

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