Interest rate news a boost for home owners
In case you missed this week’s Saturday Age newspaper, the latest interest rate news would have given local home owners an extra reason to smile as we head towards the new year.
As regular readers of our weekly Market Updates would know, there has been quite a bit of commentary from various economic forecasters that the next move in official interest rates by the Reserve Bank could still be downward, rather than upward as many people have assumed.
However, that belief has certainly gained strength recently, as the front page article of The Age on Saturday December 29th said. Written by Matt Wade and headed “Rate cut on cards amid flat economy”, some of the quotes from the article included:
“Whilst most market economists expect official interest rates to remain on hold for the next 12 months, AMP’s chief economist, Shane Oliver, is among a small group of experts forecasting the Reserve Bank to reduce rates in 2019.”
“If a 0.25 percentage point cut is passed on by lenders in full, it would save a household with a $400,000 mortgage roughly $1000 a year in interest costs, Dr Oliver said.”
Interestingly, the chief economist at Westpac, Bill Evans, (the man who predicted our current extended period of record low interest rates), has forecast no change to our current low rates for another two years. A few weeks ago we also saw the NAB change its forecast, predicting that we would not see an increase in the cash rate until the second half of 2020.
So, no matter whose predictions you choose to believe, it seems that the interest rate news is likely to be positive for home owners for quite some time to come…which seems like a good way to approach 2019.
Don’t forget that our office will reopen for business on Wednesday January 2nd, so if you have any questions about the current property market, don’t hesitate to give us a call.
Best wishes,
James Hatzimoisis & John Aaron Nakic
Directors – Barry Plant Real Estate
Taylors Lakes, St Albans & Caroline Springs