Interest rates will rise. But don’t be too concerned!
“I can’t invest in property. If I do, the interest rates might go up!” Have you ever found yourself saying this? If you are holding off on starting your investment property portfolio just in case the interest rates rise, you should know this: interest rates WILL rise… and they will come down again!
Interest rates are set independently to help keep Australia’s inflation rate steady. If interest rates are going up, it means other things will too, like rents and wages. Thus, if people are unable to afford the increasing interest rates, more people will be renting, putting further demand on the rental market. As a result, rents will go up too.
Interest rate fluctuations should not be the reason you do or don’t buy a property. However, you should prioritise having a cash buffer to cover yourself should the interest rate rise. Unprepared investors may be forced to sell, while you can hold onto your property, riding the wave while the market adjusts. It’s not about buying property, it’s about buying time.
Stay tuned for more daily insights from my book, Wealth Through Property.