Economists from around the country are predicting a rise in the official cash rate at today’s meeting of the Reserve Bank of Australia.
According to new data released by the Courier Mail today house prices posted their biggest monthly increase in at least five years in January 2010, while business and consumers appear to be regaining confidence.
The reports came on top of stronger-than-expected construction and capital expenditure data, upbeat business investment plans for the next 18 months and recent robust labour force data.
We Find Houses Managing Director Paul Wilson says, “I think a rate rise is not a sure bet in March, especially after the Reserve Bank’s decision to leave rates on hold in February 2010. That said, I do believe we are looking at having a cash rate 100 basis points higher than where we are now by December, and this is a position held by some of Australia’s leading economists, especially as the economy is forecast to gain further momentum. This obviously means if the Reserve Bank of Australia holds off on raising rates in March 2010, they will make up for it in the remainder of the year.”
What does this mean for property investors?
Paul says, “ It means factoring in these extra costs into your finance structure. If you are looking at purchasing an investment property customers must be prepared for this rise in interest rates, so they have enough incoming funds to cover their expenses. This will also make some Australian suburbs more attractive to property investors, and that is where We Find Houses can help. We provide specialised property investment services to our customers which optimises their property portfolio.”
For more information on We Find Houses call 1800 600 890.