As I ponder purchasing more property in 2010....one issue which comes to mind is what will happen to interest rates. I was fortunate enough as previously mentioned to fix my rates in April/Aug. I did this based on my previous crystal gazing and research which showed that IR rates would go up around late 2009.
Now looking into the future...I am of the opinion that interest rates will not reach the highs previously in 2008 when they hit about 9%. Why?
1. The level of indebtedness in OZ is quite high
2. Banks are pricing in more agressive rises based on so called funding costs which hits consumers harder much more quicker.
3. Neither the RBA or the Feds want to unfairly taint the current labout government prior to the next election - expected in late 2010/ early 2011
4. Global growth will not be your standard V recovery globally ..it will be more gradual and will slower over time.
On this basis...I have factored in a top rate of about 7.65%...or 6.95% for basic variable rates.
Look forward to hearing from people of their thoughts.
Now looking into the future...I am of the opinion that interest rates will not reach the highs previously in 2008 when they hit about 9%. Why?
1. The level of indebtedness in OZ is quite high
2. Banks are pricing in more agressive rises based on so called funding costs which hits consumers harder much more quicker.
3. Neither the RBA or the Feds want to unfairly taint the current labout government prior to the next election - expected in late 2010/ early 2011
4. Global growth will not be your standard V recovery globally ..it will be more gradual and will slower over time.
On this basis...I have factored in a top rate of about 7.65%...or 6.95% for basic variable rates.
Look forward to hearing from people of their thoughts.