Will interest rates rise?
Well, the RBA has stated that it has no intention to raise rates before 2024 however a study by Rita Thomas discovered that 40% of Australians think there will be a rise before 2023. What do you think?
One key reason for a possible interest rate increase is due to our economic recovery. If we continue to see the economic growth rate and inflation increase as it is the RBA feels it wouldn’t be sustainable therefore an interest rate hike may help slow this.
The other and perhaps more pertinent reason for a possible rate hike is the help slow property prices. Buyers are feeling the pressure with runaway house prices and struggling to keep up. Many homes selling before Auction and in my area many more are selling before they even hit the market.
Although an interest rate increase may help dampen the current growth it will have adverse effects on other sectors of our industry so instead, there may be a need for other incentives to help buyers. However, with the current national property growth, year to date, sitting around 6% and an average prediction of 16% growth in 2021 buyers will find themselves struggling to find an affordable property and even harder to find another $30,000 for a house deposit.
That being the case, some experts forecast that we could see home loan interest rates drop to 1%.