Investor’s Club Updates On Recent RBA Low Interest Rate Announcement

Investor’s Club Updates On Recent RBA Low Interest Rate Announcement

 

On November 3, the Reserve Bank of Australia (RBA) made the momentous decision to further lower the country’s official cash rate.

From what was already a historic low of 0.25 per cent, the bank’s board surprised us into completely unexpected territory.

This news was received well by many buyers and investors in Australia who see the value of buying properties for future wealth

Many economists expect the low rates to borrow money – and the fact that savings accounts are paying so little – will push more buyers and investors into the property market, driving up prices. Smart investors will jump in before the prices start to climb up.

In the same vein, Founder and C E O of DG Institute talked about how the property prices across the country remain about 1.5 per cent down on their pre-pandemic levels, with Sydney down 2.3 per cent and Melbourne down 5.6 per cent. But the latest figures from CoreLogic show that even before the latest interest rate cut prices had begun to creep back up, with the market rising 0.4 per cent in October. At the same time, the tail end of the recession means there are a large number of distressed properties set to come onto the market, providing an affordable entry point.

Points of importance to buyers and investors

  1. “Given the outlook, the Board is not expecting to increase the cash rate for at least three years.”
  2. Loans will mean extremely cheap home loans for the foreseeable future.
  3. Most banks have quickly moved to lower the cost of their fixed home loans
  4. The number of interest people receives for money in the bank has also been slashed.
  5. Borrowed money is extremely affordable, prices are down
  6. The economy is headed to emerge from slumber
  7. There is an expectation of a large number of distressed properties being advertised onto the market, providing an affordable entry point.

 

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