Economist predicts significant interest rate rises –
Economic forecaster BIS Shrapnel has urged home owners and investors to lock in their interest rates.
Director and chief economist Dr Frank Gelbor has told a Brisbane conference that interest rates are likely to rise significantly.
He says business investment in construction and equipment will take over from residential property as the growth area in the next few years.
“It’s too late for property now when interest rates rise substantially in 2005 and 2006 – it’ll kill the housing market very quickly,” he said.
“[If] the housing market goes down the tubes in 2006, [it’s] not because of over-supply but because of the substantial rise in interest rates.”
very interesting – im scared like a rabbit in headlights. dont wanna have 400k or more debt when this happens. if it happens..
I’m in my early 40’s and remember like yesterday when I was paying 19.33% to Citibank in 1991 on debts over 2.5 million dollars, lets see how many gurus will survive when we hit 10% … come on baby let it happen … I love bargin buys … sorry! … Phil
Bring it on!!!!!
Good to hear from someone who is older and been around longer than I.
Thats why I am sitting on my bum and doing nothin.
Current fixed rates are around the 6.99% for five year mark for those considering a change.
I spoke to this lender this morning and they are expecting a rise in the near future. Fortunately they have free rate lock from date of application.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Richmond – where did you get this from please? Do you have a link or something? I would be interested to read the full report.
Extensive list of new Perth property available for sale.Alternatively, become a joint venture partner in one of our property development partnerships – contact me to find out why our developments are unique. John – 0419 198 856
Gday,
Well i am only a young fella but i can se some flaws in the argument that intrest rates will rise to 15%or over. If this were to hapen how do the investors react to a rate rise?? I know increase rents….well with rents being at such high levels then surely the gov’t will not allow this to increase rents to crazy $$ so therefore they will try to keep a hold on intrest rate rises…. Am i wrong? Is it possible that prices on property can drop without intrest rate rises?
Please offer some thoughts[8]just to be contrarian for a change. noticed today bank stocks up again due to increased likelihood that US interest rates will remain same for 2004 and thus aussie interest rates will only increase slightly. nab has jumped 20 cents today. last month they were 29.80 – now 32 bucks.
It is probably better to focus on ‘real interest rates’ ie nominal rates minus inflation.
If we head into an economic slowdown, inflation usually reduces, and if interest rates even hold, then effectively, the real interest rate increases.
Historically, the lower the inflation rate, the lower the rate of increase in asset prices (eg property).
It is also worth noting that the increase in the AUD, drives inflation lower through cheaper imported goods, which gives the same increase in real interest rates.
James
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