Christmas comes early with the cash rate
December 4, 2014 / Written by Rich Harvey
If you're looking to buy investment property in Sydney over the summer, then the Reserve Bank of Australia (RBA) has dropped an early Christmas present that will work in many buyers' favour. In a December 2 statement, RBA Governor Glenn Stevens announced that the official cash rate (OCR) would stand firm at 2.5 per cent, taking this lengthy period of stability to 17 months.
What's more, the RBA Board will not convene over the New Year's break - meaning the cash rate is to stay there until at least February 2015. And if Mr Steven's statement holds true, we may see the rate push into record-breaking territory.
The longest period of stability in modern history
In his statement, Mr Stevens spoke of the future prospects for the OCR: "On present indications, the most prudent course is likely to be a period of stability in interest rates".
The Housing Industry Association (HIA) believes this could mean Australia is in to set a new record in cash rate steadfastness.
"The odds are shortening on Australia experiencing its longest period of interest rate stability in modern history," said Harley Dale, chief economist at the HIA. He stated that the organisation expects the OCR to stand firm for some time into 2015, which would take the current holding period past the previous record of 19 months, set between December 1994 and June 1996.
If this does occur, then it provides an unprecedented period of calm upon which investors can build a strong portfolio of Australian property. However, remember that increased buying power doesn't mean you should jump in and buy the first property you see. Engage a buyers' agent for the right advice and negotiating tactics, and you can see great results your returns.
Conditions still good for investors
In the December RBA release, Mr Stevens briefly discussed the investment conditions in Australia, and the update was largely positive. He noted that investors were still looking to make the most of the low interest rate environment, with their enthusiasm in the market increasing lending, which has in turn pushed up credit growth.
Importantly, Mt Stevens also mentioned that dwelling values are continuing to rise. This is one of the most important elements for an investor, and a great sign for the coming months.
To make the most of the holiday period's extended stability and buy investment property in Sydney, it's vital that you speak to a buyers' agent. With so many buyers wanting to get the right property, it can be hard to work out where the best value for your money is. We can assess your situation and use our expert knowledge of the market to cut out the stress on your end, and help you invest with intelligence and confidence.