Low rates here for long term giving buyers more time to get into property market
Interest rates are more likely to fall before they rise again, giving more hope to homebuyers trying to break into the property market.
Interest rates are more likely to fall before they rise again, a senior researcher at Bendigo Bank has predicted, giving more hope to homebuyers trying to break into the property market.
David Robertson, the Bendigo Bank’s Head of Economic and Market Research told a Deakin University Alumni event in Geelong on Tuesday that indicators showed low interest rates would remain a feature of the economy for the next five to 10 years.
“When you consider we’ve got a 1 per cent cash rate and it’s pretty likely we’ll get down to half a per cent at some stage next year, gearing when interest rates are low makes sense,” Mr Robertson said.
“Interest rates have to go up but it looks like a really long, steady period of low inflation, low interest rates.
“And that’s difficult for savers and retirees, but has it happens specifically for housing, we’re facing four to five years of low interest rates.
“That’s clearly going to have an impact on the ability to borrow,” he said.
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Mr Robertson joined Christopher Ratcliffe, senior lecturer at Deakin Business School, in a panel discussion about Geelong’s property market.
Mr Ratcliffe said recent falls in the property market should be seen in the context of a sustained period of growth prior.
“For the Greater Geelong area, they’ve experienced a downturn but prior to that there has been very good growth.”
CoreLogic data shows capital growth of almost 40 per cent in the City of Greater Geelong over five years, with some suburbs rising up to 65 per cent in that time.
Mr Ratcliffe said while inner Geelong suburbs were the prime drivers of property prices, land developments were creating more entry-level opportunities further out.
He said Geelong property offered better rental returns that in Melbourne for investors.
Mr Robertson said new finance data showed first-home buyers were more active.
“Housing finance data shows a sharp rebound for owner-occupiers and investors but the largest was first-home owners,” he said.
Official data shows the number of loans for owner-occupier and investment buyers had risen for consecutive months, but that the number of loans to owner occupier first-home buyers rose for the fourth consecutive month.
Originally published as Low rates here for long term giving buyers more time to get into property market