Interest rates have always played a major role in the affordability of investment in the
Residential Property Market. The good news is they have never been lower in living
memory. The further good news is they are very unlikely to rise much, if at all, in the
Most of the independent economists of good repute actually see rates
falling further. There is a very good chance that the Official Cash Rate (OCR) may end up in
negative territory in the new year. This is not good news for those relying on bank deposits
for income, but very good news for those with mortgages. The Reserve Bank is determined
to keep interest rates low (even lower than they are now). They are using a number of
measures to ensure this, including setting the OCR at a lower rate.
For Mum and Dad investors the low interest rate environment is an ideal opportunity to
leverage into an investment property with positive cash flows (positive gearing). Providing
they meet the criteria of responsible lending, this opportunity to achieve financial goals
through investing in newly constructed residential property is undeniable.
Procrastination is the biggest hurdle to financial success. To overcome this hurdle, if it
applies to people, is to go through the financing and fact finding process. This is where
Journey2 is invaluable to potential investors. They can examine your individual financial
position and establish the appropriateness or otherwise of investing to achieve your
medium and long term financial goals (dreams, given a time frame and dollar amount).
Procrastination often leads to people remaining in approximately the same financial
position through their working lives. It explains why some people succeed financially and
The cost of delay (a subject worthy of it’s own blog) is measurable and can’t be
undone. The only thing you can do is change your financial future. This requires action. The
opposite to procrastination. Interestly, most people’s financial future is not dependant on
levels of income. If this were not so, then people would become wealthier as their incomes
So back to the beginning. A major cause of procrastination revolves around fear of interest
rates rising. In simple terms this is normally related to inflation rising. There is little
prospect of this happening globally to any great extent. Therefore we should be remaining
in a low inflation/low interest rate environment for the foreseeable future. Returns on
saving have disappeared. Returns on investment are the key!
To discuss this further and see whether you can overcome your procrastination, why not
contact us for a no obligation/ no downside conversation!! Or you can continue to watch
others succeeding while you continue to increase the cost of delay. Your choice!