Interest Rates are Down, Down, Down

Pictured - 166 Baptist Street, Redfern, Sold $1,330,000 - $130,000 over reserve on the 28th September 2019

The base interest rate was reduced today by 0.25% of 1% on the 1st October 2019 by the reserve bank of Australia, down for the third time this year to 0.75%.

This is officially the lowest interest rate in the history of Australia and can be considered as a win for mortgage holders or home buyers who are considering borrowing money.

We believe this will add fuel to a fiery Real Estate market place as auction clearance rates exceed over 80% for the NGFarah team.

We are noticing a distinct difference in buyer confidence, compared to 12 months ago and there are certain events this year which have been key to fuelling confidence through the whole economy.

Interest rates drops were one, three consecutive interest rates drop is a massive confidence boost. The re-election of the liberal government traditionally interest rates have always been lower under liberal governments and finally an increasing amount of quality property coming to the market will definitely inspire potential buyers.

In relative terms, there is still an overall shortage of properties which is keeping prices top heavy and this trend is understandable as people are less likely to sell when interest rates are extremely low.

On the downside for retirees and for people relying on interest rates to accrue income from their deposits, this is very bad news. Banks are offering around 1% to deposit holders so therefore there is no real incentive to have your money in the bank. Real estate will return investors around 3.5-4% and more importantly investors should get some kind of capital gains out of real estate.

The Commonwealth bank recently released a report saying consumer confidence has spiked, this can be contributed to the new tax refunds & a general increase in consumer confidence.