Interest Rate News - January 2010
The Reserve Bank of Australia do not meet in January, therefore the interest rates remain as they did in December 2009.
It was stated last year that the Australian economy would stumble and decline in 2009 and property prices would decrease. These predictions did not come true. In fact, right across Australia, property prices experienced good capital growth in 2009 and should have a strong year in 2010 with 5-10% growth on average, predicted by many economists and higher growth rates in premium locations.
The majority of economists are predicting a better year in 2010, in terms of capital growth and whilst we can expect to see an increase in interest rates throughout the year this will be offset with the anticipated "housing boom" to meet the increasing backlog of housing and demand from increasing immigration.
The key challenges remain on the cost of funding, availability of funding/credit and the ongoing dominance of the major banks. Hopefully we will start to see some easing on available credit when confidence comes back into the "securitization market" later in the year.
As always, no point in focusing on things we cannot control but rather those things we can control.
