Lately our Professionals Mudgee Real Estate team has been fielding questions from Mudgee residents about the RBA’s decision at the beginning of December to drop interest rates. With the current cash rate sitting at just 3% – the same low figure reached at the peak of the global financial crisis in 2009 – it seems many are worried about the sturdiness of our economy. For those who are worried and hesitant to make any moves within the property market, we’d like to share some advice that we received from Smartline Personal Mortgage Adviser, Paul Raad.
According to Raad, the main difference between the low interest rates of today and those of 2009 are the reasons behind the RBA’s decision to make the cuts. In 2009, rates were lowered to stimulate the broader economy, whereas the low interest rates we see today are due to the effect of the high Aussie Dollar on our export-oriented industries. With the USA printing huge numbers of American Dollars, and overseas investors viewing our Aussie dollar as a safe haven for their cash deposits, it remains difficult to bring our dollar value down. Normally the RBA would be wary of inflation from such a low interest rate figure, but with mortgages costing more now than in 2009, there is far less risk of this being problematic.
Some are even predicting that the RBA will make further cuts between now and August 2013, with the ASX futures market already suggesting that two further 0.25% decreases could be on the cards. This should bring a smile to all Mudgee real estate owners and buyers alike.
We have spoken to many people teetering on the edge of buying their first home, but who have hesitated, waited or procrastinated because they’re not sure if it’s the right time. If this sounds like you, we’re here to say that now is most certainly the time to buy!
With many buyers caught up in the fun of school holidays there is usually less competition at this time of the year, and with interest rates now at a 3-year-low, what are you waiting for?