Interest Rates in Australia

HOW WILL THE CORONA VIRUS OUTBREAK IMPACT  INTEREST RATES IN AUSTRALIA?

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In the last few weeks, increased expectations of an Australian Recession had been seen, a major slowdown in everyday business activity, not to mention the trillions of dollars wiped off the global share markets.

There has been a lot of speculation over the impact of the Coronavirus on Australian Residential Property and the interest rates in Australia.  Addressing the impact of the virus on the Australian economy, RBA deputy governor Guy Debelle recently made a statement that is reassuring regarding the current situation.

The Reserve Bank has anticipated that low interest rates, the revival of residential construction and infrastructure spending will come together to support the Australian economy.

“The effect of the virus will come to an end at some point,” Debelle said while addressing the Australian Financial Review Business Summit on Wednesday, 11th of March 2020.

RBA deputy governor, Guy Debelle recently spoke about the Australian government’s plan to offer jobs and support small scale businesses that would have an overall positive impact on the economy in the coming times. Furthermore, the government is still working on forecasting the impact of the disruptions in supply chains on the retail and construction industry.

The RBA has confidence in the Australian banking system, as it shows a promising liquidity position in the current times. The Australian banks have already managed to raise a notable sum of wholesale funding. Therefore, the Australian banks are prepared to face a period that may be marked by disruptions in the chains of demand and supply. Currently, the RBA hasn’t witnessed any pressure in the day to day operations of Australian banks.

Interest rates in Australia

Today, the 19th of March 2020, the RBA has reduced the cash rate to a new record low of 0.25%.

Since June 2019, the cash rate has been reduced by 100 basis points, and at present, it is at a notable 0.25% low. RBA deputy governor, Guy Debelle also talks about financial markets and how there has been a marked increase in “risk aversion and uncertainty”.

This is something that is also likely to make it hard for markets to change and fix new prices for financial assets. According to Debelle, the Coronavirus outbreak is bound to have a significant impact on the Australian economy, but for now, one cannot anticipate exactly how big the impact will be. In the meantime, one can only estimate the direct impact of the virus outbreak on different industries for the March quarter.

Like Australia, there are many world nations that have experienced a reduction in policy interest rates. These interest rates are also expected to decrease further in many of these countries. Similarly, there has also been a historic decline in government bond yields. But, as compared to the US, Australian government bond yields have not noticed as much decline.Australian Business Review

 For now, the RBA does not see any signs of disruptions in the exports of goods such as iron ore and coal. As a result, the prices of iron ore and coal are intact and have not been impacted by the virus outbreak on a global scale.

The RBA is hopeful that the Australian government’s fiscal and monetary policy can come together to help overcome a struggling phase for the economy.  Once the virus outbreak is contained, this will help Australia’s economy to thrive once again.

The RBA looks at the Coronavirus outbreak as an alarming factor that has the potential to disrupt the chains of demand and supply. This is why the RBA is looking for solutions in the monetary policy that can promise a more than usual high demand to meet the crisis.

Interest Rates in Australia

Another way in which monetary policy can help tackle the impact of the virus outbreak on the economy is through its influence on the exchange rate. This strategy can moderate the impact of the virus outbreak on external demand which then can also be controlled and mitigated.

Apart from the monetary policy, a drive to lower the interest rates by RBA will also prove as a possible measure to deal with the impact of the virus outbreak on the Australian economy. There is no doubt about the fact that the low interest rates in Australia will offer a sigh of relief for businesses with debt, along with providing more disposable revenue to the domestic sector.

The Reserve Bank is of the opinion that the Coronavirus outbreak will surely weaken the economy on a global scale, especially in the first quarter of this year. The two sectors in the Australian economy that will be directly hit in the March quarter of 2020 will be tourism and education.

Australian Business Review

But, for now, one cannot clearly ascertain the impact of the virus outbreak beyond this quarter. After the March quarter has passed, one can expect a lot of significant changes not just in the Australian economy, but also in the economy on a global scale.

Source: RBA

Why Invest in Real Estate Brisbane?

Real Estate Brisbane

What is so great about South East Queensland?

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Why is it such a good time to invest in South East Queensland at the moment?

Well, take a look at the Brisbane property market performance at the moment.

Brisbane

Brisbane’s stable property market performance is on display once more as we approach the middle of 2019.

And that is only one reason why Real Estate Brisbane is so popular at the moment. That is, we not only refer to Brisbane city, but rather to Greater Brisbane.

Real Estate Brisbane

The demand for Real Estate Brisbane is growing by the day

One of the key indicators well worth watching, is Queensland’s net interstate migration number. Historically when this figure is on the rise, Brisbane house prices get a boost. At the Brisbane Property Market growth peak in 2003, there were over 40,000 extra residents joining the Queensland ranks from other states and territories, (Australian Financial Review)

That figure plummeted post- GFC. The silver lining is that we’re now well and truly tracking on an upward curve after coming off this low base. There is no doubt that many of these buyers are affordability migrants – those now priced out of Sydney’s real estate market who are keen on relocating to QLD and enjoying the lifestyle. Best of all, many are selling up their Harbour City assets and buying here, mortgage free, in Queensland and with a big chunk of change left over. Recent growth increased interstate migration to 17,500 new residents in 2017 and 24,000 in 2018 (Matusik).

Gold Coast

The Gold Coast property market has experienced strong property growth over the past years. According to a new CoreLogic report, the Gold Coast recorded the second highest property value growth across regional Queensland in the last financial year.

Real Estate Gold Coast

Real Estate Gold Coast still in demand

With experts predicting the only way for the Gold Coast property market to go is up, some of the main Gold Coast property market drivers are population growth, increased job opportunities and the low Australian dollar have all contributed to a better performing Gold Coast property market. Major developments on the Gold Coast have been transforming the city into what people are referring to as – Australia’s most beautiful city. With a large number of new construction and infrastructure projects, there’s been a higher number of job opportunities becoming available. This helps drives demand and many are moving in to take advantage of the great Gold Coast lifestyle and new job opportunities.

With higher demand, rental prices have been going up leaving many first home buyers looking for ways to get into the property market by taking advantage of the $15,000 Queensland first home owners grant and record low interest rates. Many home buyers are buying off the plan in new estates and developments. This has helped to increase the demand for more construction jobs and increased property prices.

Brisbane Western Suburbs

Ipswich

The western growth corridor out through Ipswich is attracting its fair share of affordability driven buyers looking for growing infrastructure appeal to help boost their property values.

Ipswich itself has cranked up its cool factor over the past few years, so expect its current popularity to continue.

Brisbane Northern Suburbs

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Similarly, the Northern zones out to Redland remain desirable for those seeking established housing for the longer term.

In the Moreton region, upgrades to transport infrastructure and a rise in the availability of essential services and facilities bode well. In this area, supply isn’t an issue and 2019 will again be a year of growth in these suburbs.

Brisbane Southern Suburbs

Logan areas

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Logan sits at the heart of the Southern Brisbane – Gold Coast corridor,

one of SEQ’s strongest growth regions, delivering strong population, employment and expansive investment opportunities.

The City of Logan is just 30 minutes from the Brisbane CBD and 35 minutes from the Gold Coast. Logan LGA has the second fastest projected annual population growth in South East Queensland from 2016-2036 at 2.3%. Logan LGA population projection for 2016 is 313,785 and projected to grow to 500,881 by 2036.

The City of Logan is uniquely located to access the best that South East Queensland has to offer. This established city’s residential neighbourhoods continue to flourish giving locals a wide range of lifestyle options with older suburbs being revitalised through urban and community renewal projects.

The city looks to the future with strong investment into emerging industries such as transport and logistics, manufacturing, health care and education.

SOURCE: Projected population (medium series), by local government area, Queensland, 2016-2041. URBIS Logan Report 2017

Middle Ring Brisbane Suburbs

Stepping a little further out, the mid-ring of housing from 6 to 20 kilometers from the CBD, this sector is expected to remain positive with similar characteristics of firm demand and limited stock listed for sale. Expect upward gains during the rest of 2019 again.

Outer Brisbane Suburbs

In the outer fringe supply is good so prices have remained relatively stable. In fact, most master-planned community projects have seen good demand for vacant land this year as affordability investors look to build their dream homes or decent yielding investment properties with depreciation benefits.

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Then please complete the form below so that one of our friendly team members can get in touch with you to find out where you would like to buy a home.

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Brisbane Real Estate is in average more affordable