๐—›๐—ผ๐˜‚๐˜€๐—ฒ ๐—ฝ๐—ฟ๐—ถ๐—ฐ๐—ฒ๐˜€ ๐—ฝ๐—ฟ๐—ผ๐—ท๐—ฒ๐—ฐ๐˜๐—ฒ๐—ฑ ๐˜๐—ผ ๐—ท๐˜‚๐—บ๐—ฝ ๐Ÿฏ๐Ÿฌ% ๐—ถ๐—ป ๐˜๐—ต๐—ฟ๐—ฒ๐—ฒ ๐˜†๐—ฒ๐—ฎ๐—ฟ๐˜€: ๐—ฅ๐—•๐—”


Itโ€™s the document that was never meant to see the light of day.

But a Freedom of Information request reveals the Reserve Bank of Australia projects a 30% increase in house prices if interest rates remain low for the next few years.โฃโฃ

The internal, not-meant-for-public-viewing analysis by the RBA looks at the impact of low interest rates on asset prices, including property.โฃโฃ

The November 2020 document projects that housing prices could increase by 30% after about three years, so long as the official cash rate remains near record low levels (at or below 0.5%).โฃโฃAnd that part of the equation looks promising, as the RBA board said they โ€œwerenโ€™t expecting to increase the cash rate for at least three yearsโ€ when they cut it to 0.1% in November.โฃโฃ


What does this mean for property owners?

A lot more than just a potential 30% increase in the value of their property.โฃโฃ

The RBA says both households and businesses can expect their borrowing capacity to increase, too.โฃโฃ

Thatโ€™s because low interest rates will lift asset prices (including property), which in turn will boost wealth, household spending and the value of collateral.โฃโฃ

And as the value of collateral increases, so too will the borrowing capacity of households and businesses, the RBA document states.โฃโฃ

What about prospective property owners?

With house prices projected by the RBA to rise 30% over the coming three years, it begs the question: is now a good time to jump into the property market?โฃโฃWell, like most things in life, it will depend on your earnings, savings, borrowing capacity, goals, and where youโ€™re at in life right now.โฃโฃ

But itโ€™s worth noting that there are a wide variety of generous federal and state government initiatives currently on offer, including the First Home Loan Deposit Scheme, HomeBuilder and stamp duty exemptions/concessions.โฃโฃ

The quickest way to find out whether you can finance that home you have your eye on is to get in touch with me today โ€“ Iโ€™d love to explore your financing options with you.