Low Interest Rates Continue – Let’s Party

Here in Australia we are so lucky to continue to experience low interest rates. Long gone are the days of escalating rates that took people’s homes and livelihoods away from them.

Through careful observation the Reserve Bank of Australia continues to monitor and control the rates we pay on our mortgages and keeps them as low as possible.

We are not suggesting for one minute that it is a good idea to go out and blow any spare cash you have. This is not what we recommend when we say – Let’s Party!

Rather, we are thinking more along the lines of:
1. Let’s get into the market and take full advantage of this great situation
2. Pay down your current mortgage as quickly as possible and then do the first point.

Now this is something to celebrate!
Imagine if you can, being able to pay down your mortgage in under five years. If this is your plan you could not hope for a better environment to do it in than when rates are low.

Once you have your money under control (and not the other way down) you free up your cash to do something worthwhile. Think of holidays, restaurants and theme parks with the children. Perhaps do a course and learn something new or even get into an investment property.

Property Investment – The Greatest Nest Egg
If you are dreaming of building a nest egg for you and your family then now is the best time to dive in.

The persistently low interest rates make it easy for you to move into the investment scene and build an empire to sustain you and your crew.

Fountain Property Group specialise in sourcing exactly what you need and can afford. We are not bound by territories and boundaries and are able to search for that unique and perfect investment wherever the market may take us.

Whether you are dipping your toe into this amazing, fortune building environment for the first time or you are a seasoned professional, we are able to source and provide the right property at the right price.

Whilst the days of escalating interest rates are long gone, they are not forgotten and they still provide the angst to deter and even stop an investor in his or her tracks.

It is essential that due diligence is conducted for each and every property that is considered. We do all the hard work for you and take the stress out of the decision making phase.

RBA Rate Cuts: How Low Can You Go?

The Interest Rate has dropped by 25 basis points to a historic 2% last 6 May 2015 to further stimulate the economy and has raised concerns on the current state of the housing market. The Reserve Bank, in its decision has shown signs of further rate cuts, stating that “The board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time”.

The expectations for the RBA to keep rates on hold have fueled fears of a bubble – like condition for the housing market, particularly in Sydney which might lead to financial instability in the near future.  Chief Economist for AMP Capital Dr Shane Oliver said that even with the risks involved, “It is dangerous to set monetary policy based on one city”.

Treasurer Joe Hockey has supported the RBA’s move to cut the official cash rate and has urged Australians to borrow more to further stimulate the economy.

With the RBA open for more cuts ahead, how low can the interest rates go?

The 25 basis point decrease in the official cash rate on a $300,000 mortgage has decreased the monthly repayment by $44, with the lowest variable rate down from 4.23% dropping to 3.98%, according to comparison website Mozo.com.au. If homeowners decide to pay the same amount prior to the rate cut, they cut their mortgage payments by 13 months.

Comparison website Finder.com.au is expecting rate hikes to start as early as February next year, with their survey expecting a rise to 4%, peaking at 7.1%. Borrowers are encouraged to make weekly and fortnightly payments to take advantage of the rate cuts. Better to take advantage before it’s too late.

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Interest Rates May Stay Low For Several Years: RBA

The Reserve Bank of Australia recently entertained the possibility of keeping the interest rates at low levels for the next “couple of years” to aid the weak economy, provided that house prices are kept in check.

RBA governor Glenn Stevens is softening their outlook for 2015 due to weak employment data and believes that it will take several years before inflation triggers a rate increase. He also dismisses the idea that the nation is headed to a “bubble”, noting that high prices especially in Sydney and Melbourne are kept at bay by the low currency and interest rate.

Read more about this on the Financial Review website.

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Queensland To Outperform All Other States: Deloitte

Deloitte has released today their Economics Business Outlook report that showed Queensland leading all other states in the next several years due to favourable market conditions. Deloitte forecasts a 5% growth in 2015 – 16 in Queensland’s gross state product, making it a top state for the first time in a decade.

The expected growth in the Sunshine State is due to surging coal and gas exports, with over 200 million tonnes of coal exported annually. Queensland’s potential for growth is expected to overshadow the end of the mining boom, as the Australian dollar continues to fall and interest rates remain at record low levels.

Read more about this on the Cairns Post website.

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Record Low Interest Rates To Remain At 2.5% Until September 2015

The Reserve Bank has recently released a statement saying that the Official Cash Rate will remain at record low levels for about a year, after their decision to keep it at 2.5% in their September meeting, increasing the interest rate streak to 13 months.

The RBA cited the decrease of housing loans to 15 basis points as one of the major drivers in keeping the rates at 2.5%, and that forecasted property demand should taper off property price increases in the future. The RBA is also pleased with the current status of the mortgage market, saying that current policies and lending standards have met their expectations.

Read more about this on the Adviser website.