Interest rates were lowered in a move to help stimulate the Australian economy and to encourage both households and businesses to borrow money and invest, or in the words of Treasurer Joe Hockey in a statement made last week, “I say to the Australian people directly, now is the time to borrow and invest whether you’re a household or small business, now is the time to have a go to borrow some money and to invest. Invest in the things that help to create jobs.”
Low interest rates will certainly encourage people to do just that and to look at breaking into the property market or use their equity to buy an investment property.
But there are concerns about what low interest rates will do to the already overheated property markets in Melbourne and Sydney.
It is likely that house prices will continue to climb in these areas and by the end of this year it’s looking likely that that median house price in Sydney will exceed $1 million.
But while a lot of people would love to be able to buy in central Sydney or Melbourne, a lot of buyers are looking in areas a little further afield where there are still plenty of affordable properties around.
In areas like Bacchus Marsh there are plenty of great property options that are affordable for first homebuyers and still within easy reach of Melbourne, just minus the hefty price tag.
So if you have been thinking about taking advantage of low interest rates then now is an excellent time to think about buying a property.
It’s a good idea to shop around for the best home loan deal though as not all banks are offering the full interest rate cut. Also try not to overextend yourself and make sure that you have the capacity to pay off your home loan in case interest rates do go up again.
To find out whether or not you’re in a position to take advantage of lower interest rates it’s best to have a chat to a financial advisor.
And if you’re interested in buying a property in the Bacchus Marsh area (or if you would like to find out how much your current home is worth) then feel free to get in touch with the Arbee Real Estate team to discuss.