Interest Rates in Australia

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

Buy Real Estate Australia

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

House Inspection

House Inspection

Also known as….

Building Inspection

And when should you have it done?

House Inspection

A House Inspection may save you some time and some money

Buying a home is exciting, whether you are a first time home buyer or an experienced home buyer. Once you have purchased a few homes, you basically become an expert on the process, however for first time home buyers it may all seem a little overwhelming.

One of the most important parts of buying a home is the House Inspection before you actually move in. When buying an existing property, a house inspection will ensure that you, as the buyer, know exactly what you are purchasing. A house inspection can also help to get you out of a deal that is not up to scratch.

However, when buying a new home through Buy Real Estate Australia, the house inspection, also called the building inspection, will be done by an independent building inspector. The fee for the building inspection will be included in the Full Turn Key Price. To find out how you can buy a new home using Fixed Price, Full Turn Key option, Please Click HERE.

In this post, we’ll talk about how you can protect yourself with a house inspection, when buying an existing property and what exactly you can do with the information that is provided to you.

House Inspection

A House Inspection should always be done when buying a home

A Building Inspection as a Condition in the offer to purchase

If you are buying an existing home through a real estate agent, chances are that they have already suggested a building inspection prior to finalising the deal. If they haven’t, or if you are purchasing an existing home through a private sale, you should consider including a building inspection as a condition in your offer.

That means that the amount that you and the seller agree upon is based on a positive outcome in regards to the inspection. If there are any issues once the inspection has been done, you should be able to back out of the deal with reasonable ease.

If you don’t include a building inspection, as a condition in your offer, you risk being stuck in a deal that you are uncomfortable with, for a home that may not be worth what you originally thought. That may result in additional costs to you.

Building Inspections and the Selling Price

A building inspection can affect the value of a home, which may in turn affect the original offer to purchase. When you put in a formal offer, and the seller accepts it, there is a chance that you may not end up paying the specified amount if you made the offer dependent on a building inspection.

When the inspection report comes back and issues were mentioned that will cost you money to fix, you can respond with a request that the seller take those amounts off of the selling price.

If the seller does not agree to the lower offer and you no longer feel that the accepted offer price is fair, you can back out of the deal at this point, generally without penalties. That is legal, as long as the building inspection was included as a condition in your offer to purchase.

However, the seller have the right to call in a Building Inspector to verify the results of the inspection report.

Any home that has been pre-owned or that was not built by a professional residential construction company, should be inspected by a professional in order to ensure that it is built according to Australian Building code and that the buyer doesn’t encounter any unpleasant surprises.

What Does a Building Inspection Cover?

A building inspection should take a couple of hours to complete, since the inspector will be looking at so many different things. A building inspector will check things such as:

  • Wiring and outlets
  • Signs of water damage
  • Plumbing
  • Exterior and interior structure
  • Roof damage
  • Other issues that could turn out to be costly if left unnoticed.

It’s important to remember that although a building inspector will take note of as much as they can, they are not obligated to report any damage that they weren’t able to access or see. It is your responsibility to make sure that he has access to all areas that you think may have an issue. If you are buying the home privately, you should arrange access to all areas with the owner. However, if you buy your home through a Real Estate Agent, the agent should arrange that with the owner.

Make sure to be well informed regarding the responsibilities of the building inspector. Ask questions about what they will check for and what they can’t. Have a clear understanding of your own responsibilities, and those of the inspector, prior to having the home inspected so that you are both on the same terms.

Building Inspection

Relax, knowing you had a building inspection done

Finalising the deal

Having a home inspection done can save you a lot of time and even money. Think of it as insurance on your offer, which can protect you from a bad deal or unknown issues that you hadn’t anticipated. Be a smart buyer by doing your research, so that you can enjoy your home once your deal goes through.

After the home inspection has been completed, and the price negotiated (if necessary), it is time for you to go ahead and sign the contract. It is important to keep the building inspection report with all of the other paperwork that involves your new home so that you can refer back to it in the future if necessary.

Make copies of it all and save that in digital format so that you can access it easily. Store the original documents in a safe place.

If you feel at all that you don’t want to go through the stress of buying a pre-owned property, in case there may be some issues 🙂 , Buy Real Estate Australia will be able to assist you in finding your ideal new home. To find your Fixed Price, Full Turn Key Home Package, please complete the form below.