Interest Rate Forecast
Interest Rate Forecast
With interest rates remaining at record lows, home buyers are snapping up the opportunity to secure loans at this rate whilst they can. There has been increasing speculation as to where interest rates are heading in the next couple of years however it is safe to say that as the world’s economy slowly builds interest rates here in Australia should see minor increases, though when, is any ones guess. In the coming year 2018 many economists and banks are suggesting interest rates will remain at their current levels.
In early September the Reserve Bank of Australia left the cash rate unchanged at a record low of 1.5 percent, as many people expected. The Australian economy is expected to gradually pick up steam over the coming year, supported by improving outlook of non-mining investment. As the economy begins to improve inflation is estimated to rise also. The average interest rate is 4.68 percent from 1990 until 2017, far below the all-time high of 17.50 percent in January of 1990. The lowest set in August 2016 of just 1.50 percent. By interest rates continuing to be low this has helped support the Australian economy. Australia’s leading business economists at their annual forecasting conference support the continuing of record low interest rates during 2018 as the Australian dollar has appreciated over recent months, partly reflecting a lower US dollar contributing to the subdued price pressures in the economy. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast. It is expected that the economic growth will steadily climb in the two years ahead, housing investment will accelerate, and mining export volumes will grow strongly as prices fall sharply.
The Australian economy grew by just 2.6 per cent in the year to June, down from 3.7 per cent a year earlier and economists expect growth of 2.9 per cent throughout the next calendar year and 3 per cent throughout 2018 so there is a good chance interest rates will remain on hold as the Australian dollar slips to mid to high 80 US cents over the coming months. All of which is great for anyone looking at buying property, once you have settled on your choice insist on a professional building inspector organise your pest control report and building inspection report. Obtaining both reports provides you with the most up to date information about any possible issues in your potential new home prior to making that life changing purchase.