On February 3, the Reserve Bank lowered Australia’s official cash rate to 2.25 per cent – a record low designed to boost business and consumer confidence in the face of slowing economic growth.
Now, for those investors who rely on a return from savings, this is not the best news. However, for those looking to invest in property, record low interest rates mean it’s a good time to think about buying. February’s drop was the first in just over 18 months, and economists have suggested that if this cut were to be passed on in full, the average level of home loan rates would be at its lowest since the late 1960s.
Growth in the property market is strong, and governments and the Reserve Bank are cautious not to create a property boom. But with economic data suggesting that more and more Australians are choosing to pay off their mortgages rather than spend money on goods and services, low interest rates and tight rental markets are appealing to those who are looking to invest their cash in property.
Whilst low interest rates mean it’s a good time to hunt for a home loan, don’t be tempted to borrow more than you can comfortably afford: you don’t want to end up in a tight spot if rates increase in the future. However, prudent borrowing doesn’t mean you have to give up on the house of your dreams. Armed with a realistic budget, the team at your local G.J. Gardner Homes office will help you design a brand-new home that is within your price range, with the added certainty of a fixed-price contract. That ought to boost your confidence.