Oasis Property: Sydney Buyers Agents
'10 Interest Rate Outlook:
JUNE 2010
The current RBA rate being set at 4.50% is a complete turnaround from last years stance of aggressive easing of monetary policy. Personally, I think the current rates to market have pitched a tent and might camp in this vicinity for some time. I suspect the Reserve Bank will take some relief from any easing of the property market, however I see something new on the horizon for interest rates that we haven't seen for a while......competition.
Small examples such as NAB's much more competitive rates and St George's ploy of dropping its 2 year fixed rate I would suggest don't necessarily indicate changes in the price of money, but an understanding that banks will find some competition at their heels very soon and I suspect they will compromise some of their margins to mitigate this. I see the NAB rate as being one that eventually (through potential loss of market share) will see others match. Whilst no real standout contender has jumped into the fray and indicated they will take it to the banks, I suspect white label products from second tier institutions might pass down some value for the market.
In any event, whilst the forecast might be different, your tactics should not. Do everything you can to pay off your principal place of residence. There is no sense in bad debt. Realising this early I believe has been my biggest obstacle and subsequent achievement in my professional and personal life, and it should be yours too. Anything invested past this point then becomes a true set and forget proposition, not an isolated week by week proposition as markets peak and trough. The 'sleep at night' factor also increases tenfold and it is much easier to see bad events ahead and manage your cashflow.
If you think active investing is a means to achieving this same (pay off PPOR mortgage) goal, then of course I understand this also. In any event, make sure your cash flow is secure for the time you are looking to be active for. Whether it be 1,2 or 5 years or even a full market cycle. Your risk is usually well rewarded if you are well planned.
We also have 2 qualified mortgage brokers at Oasis, with the backing of Australia's largest mortgage broker. They service up to 40% of our clientele from a huge panel of lenders. To add to this, the convenience of having an in-house broker also allows you and/or your buyer's agent to liaise with your broker in real time. If the difference between buying a property or not, is a comfort call on a Saturday afternoon before auction, or an approval delivered after 5pm on a Friday (that otherwise won't occur at a branch) then I would say this has made all the difference. I have always said you should be a hard judge on price and make sure the market delivers you the best product, but inferior service that doesn't allow you to transact in Sydney's fast paced market - makes the product redundant anyway; you won't buy a property if your bank makes it untenable to transact.
Feel free to call us on (02) 8705 3252.
For a no obligation call, contact 1300 55 980 or email info@oasisproperty.com.au
