September Market Update

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rickDespite deciding to leave interest rates on hold in September, the RBA did cut interest rates by another .25 points in August for the second time this year. The rate cuts were obviously intended to stimulate spending in the economy and spur weakened inflation levels, but there is some commentary suggesting that the cut has done little more than increase consumer concern and conservatism.

It’s also sparked a bit of cautiousness in some people when it comes to property investment. Property still remains an excellent way to build wealth, so our Sales Manager, Glenn, has provided some different ways you can use property investment to grow your own wealth.

It’s also worth noting that none of the big banks chose to pass on the full rate cut to their customers. While they may not have cut rates by the full 0.25%, most people with a variable rate mortgage still would have seen some type of reduction.

What the historically low interest rates have also done is improve affordability for home buyers.  Now, it’s common for spring to herald an increase in the number of properties on the market for sale. When you combine the incentive of low interest rates and more properties to choose from on the market, it’s likely that spring could see a small upswing in property prices as a result.

Many of our clients are asking whether they should switch to a fixed interest rate to take advantage of such low interest rates, or whether they should stay on a variable rate. Of course, there are definite advantages and drawbacks to each option, so our Loan Manager, Karyn, has provided us with a list of pros and cons to consider before making your decision. And, I’ve added some tips for making the mortgage process a little smoother for you.

We’ve also had some clients who are curious about whether they should invest in property using their superannuation funds, so we’ve provided you with some things to consider about property investment with SMSFs.

We hope you enjoy the tips and insights provided by some of our key Nieuvision staff in this issue.

Rick Nieuwenhoven

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Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Any mention of interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

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