Historic
low rates mean great news for investors
We now enjoy a bank rate of 3.00%, the lowest
in 50 years, and a whopping 4.25% reduction
from the
7.25% we were all experiencing as recently as 8
months ago! This is great news for homeowners
and property
investors, and with the added benefit of falling
fuel prices, the average family is feeling relief
from the cost pressures of the past 12 to 18 months.
Competition amongst the banks and the political
sensitivity of interest rates has ensured that
the majority of the reductions have largely been
passed on to consumers. It is worth remembering
that the phrase ‘housing stress’ has
not been heard about much in recent times given
the speed and extent of interest rate reductions.
Investment returns from bonds and cash deposits
will be dropping as the bank rate falls. Savvy
investors will be looking for alternatives.
The share market awaits those who are brave
enough,
while investment property remains a solid option
given the continuing fall in the supply of
homes despite growing demand. With lower holding
costs
thanks to low interest rates, and with rentals
holding firm due to strong demand, investment
property is set to emerge as a very attractive
option in the time ahead.
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