RBA Cash Rate
Left on hold for March at 2.25%. Folks in the US are tipping a rate increase in the second half of this year as the US economy slowly improves. At the moment the Aussie dollar is still considered high at around $0.77US and inflation is still tracking on the low side with national unemployment higher at 6.4%. Based on that I personally think we’ll see another cut by June this year.
Europe is also printing €60 billion each month until September 2016 to help get their economies out of the doldrums so expect some of that cash to end up looking for a home here in Australia.
There’s whispers that negative gearing (ability to claim investment-related expenses against your annual salary) will be reviewed this year. I’ve mentioned in the past that I’m not particularly worried as our federal pollies between them own approx. $300 million in Aussie real-estate.
We’re still concentrating on the south-east Queensland market and Cairns. There is potential in pockets of south-east Melbourne (Officer and Packenham) as well as Sunshine out to the west. As always, Catherine will advise on what’s available when you get to the asset-selection stage as the stock list changes on an almost daily basis.
A mentor put me onto the following article: http://www.usatoday.com/story/money/personalfinance/2015/02/15/3-down-payments-lure-first-time-homebuyers/23424759/
It shows that there really is a cycle at play. Banks in the US are now granting 3% deposit loans to help homebuyers get into the market. The same thing was happening pre-GFC. Expect Australia will follow suit within two-three years. The effect will be higher property (land) prices as more people buy into the market.
Quote – Be greedy when others are fearful, and fearful when others are greedy – Warren Buffet