I N T E R E ST R AT E S
WILL A 2 - 3% INTEREST RATE RISE CHANGE THE PROPERTY MARKET? B Y C H R I S G R A Y, C E O, YO U R E M P I R E
One of the reasons I DIDN’T have the most successful property show on TV was that I told the truth about the market as I saw it. I didn’t have any sensationalising headlines or claims that the market was going to crash to it’s lowest level yet and nor did I predict the latest greatest upswing that was about to happen in a particular suburb. I didn’t jump on the latest NRAS or NDIS fad and I didn’t strategise on how to get the biggest tax deduction. I told viewers that I thought the
worry if you’re investing for the
for a mortgage, especially if you’ve
market would be fine for the next
long term.
done it recently after the Royal
12 months and they could go off and relax and tune back in, in a years time for another update on where I thought it was headed. That’s not great for viewer numbers, but that’s what I honestly believed was right. In the ten years I was on Sky News Business, I don’t think anything really changed in the market, especially when you look
I think exactly the same now. Sure, interest rates have risen and are
A 1% - 2% rise is $10k - $20k on
likely to rise by more in the future.
a $1m mortgage and sure that’s a
How far will they go – I’m not sure.
fair amount of extra money to find.
10 years ago we were all used to paying 7%, 8%, 9% and so if you put that into perspective 3% - 4% is still cheap. So is 5% or 6%. It’s just because we’re used to paying 2% -
back in hindsight.
3% that we’re in shock.
And that’s because I am an
But we really shouldn’t be in shock
investor that invests for decades after decades. If I buy a fantastic property in a great location, why would I ever sell it? I’m not clever enough to predict the highs and lows of the market and so why even
Banking Commission in 2020.
or panicking to sell as surely everyone including Blind Freddy knew they were going to rise. Even if you didn’t have that foresight, the banks will have done it for you when they assessed your serviceability C21 MARKET PULSE
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CENTURY 21
However, it might cost you less if it’s an investment property as you might be able to claim up to 50% back in tax. Rents are starting to rise too which will counteract that extra cost. Think yourself lucky that you haven’t got a $10m mortgage as each 1% rise would be another $100k you’ve got to find. What I do know is that a lot of property is still in very short supply, especially if you’ve bought in the blue-chip areas around our major
