Michael Marquette’s “View from the Bridge” this week looks at where Australian interest rates are heading:
It is widely believed that Australian interest rates will increase by a further 0.25% when the Reserve Bank meets on February 2. The markets have already factored in the rise, with positive economic data showing continued strength within the economy.
We still have to look out for the December quarter inflation figures which will be released later in the month but these are not expected to cause any major problems.
The Australian economy continues to outperform all other OECD countries and the Government appears to have acted correctly in dealing with the World Economic Crisis. Australia has 4 of the 9 AA rated banks in the World which is testament to the regulatory framework which is in place in the country.
It appears that further rate increases will occur throughout the year and home buyers should be factoring this into the equation when deciding how much they can afford and fixing rates may be a good option for those wanting certainty.
As we now track toward the official start of the 2010 real estate year, it is a pleasure to wish everyone a very Happy Australia Day. Enjoy the celebrations on Tuesday and may all Australians from all backgrounds have a wonderful day wherever you are and whatever you do.