Interest rates have been making headlines lately, triggering many to fret over the impact on their finances.<\/p>\n
While the cost of living is also driving north, it’s no doubt there’s some financial stress looming. However, we want to take a step back and look at the bigger picture, from a historical standpoint. Interest rates have experienced significant ups and downs over the years, and the rates we’re witnessing now are just a fraction of the whole picture.<\/p>\n
If you’ve got a home loan, chances are you’re across the rises; as of June 2023, the official cash rate hit 4.10 per cent. At first glance, it may appear alarming, especially when comparing to recent record lows. But, when compared to rates from the past, it’s actually quite moderate.<\/p>\n
During the height of the pandemic, the cash rate dropped to an unprecedented low of 0.1 per cent, after the RBA cut it 18 times since its peak at 4.75 per cent in November 2010. However, cast your mind back to the 1980s and early 1990s, and you’ll discover interest rates that were truly astronomical. We’re talking about double-digit figures here. It’s hard to fathom, especially for the millennials and Generation Z kids, but in January 1990, the cash rate skyrocketed to a whopping 17 per cent. Ouch.<\/p>\n
While the prospect of rising interest rates understandably raises concerns, it’s crucial to maintain perspective. We have experienced much higher rates in the past, and yet the economy managed to navigate through those fluctuations. It’s a testament to its resilience and adaptability. Rising interest rates can affect borrowing costs, investments, and overall economic growth. However, rule one: don’t succumb to panic.<\/p>\n
Much like the property market and hysteria around a ‘downturn’, nationally, median prices have surged by around 32 percent since the pandemic began, with some areas seeing even greater increases.<\/p>\n
Greater Geelong’s rural Connewarre saw the median house price rocket from $1.28 million in late 2019 to $2.57 million last month, according to recent PropTrack data.<\/p>\n
The data also showed that across the Greater Geelong suburbs, five towns located on or near the Bellarine Peninsula have seen some seriously impressive price growth. These five suburbs secured five out of the top 10 spots for the highest median price doubling in the shortest period. Anglesea, in particular, has witnessed huge growth, with house prices experiencing the second-fastest surge over a span of 43 months.<\/p>\n
So, let’s view the current interest rate and property market situation as part of a broader historical tapestry. It’s a reminder that the economy has weathered storms and emerged stronger.<\/p>\n
As we navigate these fluctuations, we recommend working with a broker who is customer focused, and their core strategy is to help you keep your loans competitive with not only regular rate checks, but exploring and proactively presenting options as often as you require.<\/p>\n