Written by Meegan Graham
With the recent increase in the US Federal interest rate, what comes next for the Australian property and finance market, property prices, interest rates outlook and importantly how will banks react to this change in the current landscape.
To date property prices in Sydney have continued to defy the odds. There seems to be very little slowing of the market and even with the tightening on foreign investment laws funds continue to find a way to invest in residential real estate. How much longer can that bubble last and will our reserve bank follow in the footsteps of our largest trading partner – America.
Only last week NAB and CBA announced an increase to their variable home loan and business rate on the back of the US announcement. This is an almost unprecedented move and one which could leave mortgaged Australians with an uneasy feeling. Why did interest rates go up before the reserve bank increased them? However the experts are saying there will be little movement in our cash rate this year. Who do we believe and what will be the impact for borrowing ratios and construction financing. Ultimately real estate is a supply and demand business – will interest rate movements have an impact on supply of stock to the Sydney market. How will this impact on Commercial and Industrial development and investment returns. So many questions and who has the answers?
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