The RBA predicts a 30% increase in house prices over the next three years.

It's the document that was never supposed to see the light of day in the first place. However, according to a Freedom of Information request, the Reserve Bank of Australia forecasts a 30% increase in housing prices over the next five years if interest rates continue low.

The RBA’s internal, non-public study examines the impact of low-interest rates on asset values, particularly real estate.

So long as the official cash rate remains around record low levels, property prices might rise by 30% in three years, according to the November 2020 document (at or below 0.5%).

And that side of the equation appears to be promising, as the RBA board stated in November that they “weren’t anticipating to boost the cash rate for at least three years.”

What does this signify for property buyers?

There’s a lot more to it than a potential 30% boost in the price of the property.

Both families and companies may anticipate their borrowing capacity to rise, according to the RBA.

This is because low-interest rates will raise asset prices (especially property), boosting wealth, household spending, and collateral value.

According to the RBA document, as the value of collateral rises, so will the borrowing capacity of people and companies.

What about those who are thinking about buying a home?

With the RBA predicting a 30% increase in house prices over the next three years, it raises the question: is now a good time to invest in real estate?

Well, it depends on your wages, savings, borrowing capacity, ambitions, and where you are in life right now, as it does with most things in life.

However, there are now several significant federal and state government initiatives available, including the First Home Loan Deposit Scheme, HomeBuilder, and stamp duty exemptions/concessions.

Get in contact with us now to find out whether you can finance that property you’ve had your eye on; we’d be happy to discuss your financing possibilities with you.

To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au

 

Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your situation and may not be relevant to circumstances. Before taking any action, consider your particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.

Contact Us

Schedule your free 15-min call with an advisor

Let us know how we can help below.