Cash Rate Forecast

The market is pricing 1 or 2 rate hikes by the end of 2018.

How will this affect you?

 

Unaffected. If too concerned then lock in IRs for a period for SANF. This will simply put more pressure to raise rents (already happening).

 

Could do - but the market has already priced the rises in - so fixed rates will be sitting 50bps higher?

Blacky

 

I think you need to be prepared for an eventual return to long term trend variable IRs of 7% as part of your risk mitigation.

 

The market was pricing rate hikes in 2014 (at Mid 2013) too: Wayback Machine

Be prepared for higher rates, but don't expect forecasts to necessarily be accurate either.

 

@Propertunity my concern is this: despite news in the last 24 hours that overall job creation (both f/t, p/t, amd casual) is ramping up (which is great!); latest wage/salary growth data remains stagnate for most employment sectors (and starting to go backwards ever-so-slightly in some sectors...).

How can we pass rent increases on to a market that mostly cannot bare it? With no wages growth (even though more people are 'employed' generally...) rental increases in many areas may be a tall order.

 

Forecasts and timing all move in relation to new data that comes out. There'll literally be 20+ more key data points that come out between now and mid 2018 that bring forward/delay/change the forecasts in place.

IMO i imagine the board members increasing rates very carefully and slowly. If you look at previous cash rate changes they've often followed each other and happened relatively quickly. With household's holding a lot more debt, i really doubt they'll move them as fast as they once did.

 

It does not seem to make any difference to the power companies and price rises in electricity bills..........neither matters to me as a service provider. If my costs go up, I seek to pass it onto the end user (who can cut back on FoxTel or smokes or whatever).

 

Me likey.

 

+1