As we mentioned last week, there are recent predictions that interest rates will go down in 2015, despite almost a year of financial experts telling us that interest rates are due to go up.
One of the reasons that the experts think that interest rates are on their way down now is because the property market is starting to cool off after a period of heavy expansion and price growth.
Over the last few months we have been seeing property prices start to moderate and there are concerns that they will fall flat in 2015.
Senior economist at The Domain Group, Dr Andrew Wilson, said a number of factors would cause house price growth to be “modest, at best” next year.
“Concerns over the performance of the national economy are growing, particularly in regard to unemployment,” he said.
“Interest rates have remained at the current 60-year low of 2.5 per cent for 16 consecutive months, which is the longest steady sequence since 1997-1998. With a weakening economic outlook, particularly in regards to the jobs market, the case is growing for a cut in interest rates by mid-2015.
“Without improved economic conditions and the return of incomes growth and confidence, marginally lower interest rates, however, are unlikely to have a significant effect on housing markets.”
Dr Wilson also said that he expects house price growth in 2015 to hover around the inflation rate, and that there will be more at play in real estate markets than interest rates.
“The rate of growth in each city … will be dependent on local supply-and-demand factors rather than the overarching impetus of low and falling interest rates, which has driven markets generally over the past two years,” he said.
“The Sydney housing market is set to remain the best performer, with growth likely to be at least twice the inflation rate. A top-performing local economy and the continued undersupply of housing will generate consistent buyer activity over the year. Inner- and middle-ring mid-price range suburban regions are set to continue recording double-figure prices growth.”
We will have to wait and see what 2015 holds for Bacchus Marsh, but if you are interested in knowing how your property will perform then don’t hesitate to get in touch with one of the Professionals Arbee Real Estate team for a property appraisal.