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At its meeting today, the Board decided to leave the cash rate unchanged at 4.75%.
Global economic concerns have had little or no effect on the Australian Economy. Economic conditions are looking favourable for our economy and in particular housing investment.
The more volatile problems such as Greece, Portugal, Ireland and recently the USA have all settled their political and ideological differences and in the case of the European countries they have agreed to the spending cuts that have been forced upon them by the IMF and the EU. Whilst in the USA political infighting was threatening to prevent a loan payment to China. That embarrassment has also been avoided.
The markets that are having the major effects on Australia however are China and India. Both of those countries have introduced economic measures that are designed to slow their economic growth.
These measures are designed to create a more stable and long term successful market for their products.
These economies have come to realise that whilst exporting cheap goods to other countries and dominating those markets can give a short term gain. The eventual long term damage to the other economies will also lead to internal economic problems in those countries.
By these countries slowing their growth it will give a much more stable and long term economic growth for resource rich nations such as Australia.
There is plenty of evidence around to show that a lack of consumer confidence one of the major factors holding back the Australian economy.
The economic stability that we are encountering is encouraging overseas investors. This in turn gives the banks the ability to reduce their interest rates outside of any decision by the Reserve Bank. This combined with relatively low house prices gives us an ideal opportunity to purchase either their first home or an investment property.
No-one can predict when the next boom will occur or even when the current slowing will be reversed. However history reveals that it has always happened in the past and that what we are experiencing is simply part of that cycle.
The adage “History always repeats itself’ so far has always proven to be true as far as the Real Estate market is concerned and there is every reason to believe that it will do so again.
Another old rule in property investment is to “Buy when others are selling and sell when other are buying”.
This advice ensures that you buy when the market is low and sell when the market is strong.
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