Market Report Fixed Rates Fall

Two of Australia´s largest banks dropped their fixed rate by 0.6% amid fears of a financial crisis looming in the United States of America and parts of Southern Europe.

Only last week the United States of America had their credit rating downgraded by Standard & Poor from a AAA rating to a AA rating putting their financial markets into a free fall just over a week ago.

Financial markets have since recovered, yet it appears the big banks are pre-empting themselves for a slowdown in demand for mortgages and have already started slicing their interest rates in a bid to have the competitive edge.

There is also a strong chance when the Reserve Bank of Australia and its board meet early next month that rates may fall. This is exactly what happened during the Global Financial Crisis - interest rates tumbled by more than 3%.

This has to be good news for the average family with a mortgage and a secure job or new home buyers just about to embark on a loan.

Interest rates go up and down during the course of any property cycle, yet in the past our Reserve Bank of Australia have always used interest rates to control inflation and as a result of a sound banking policy Australia withstood the GFC and avoided a recession that most of the Western World experienced.

There is still a shortage of quality properties for sale in the South Eastern Region of Sydney. This is good news for potential home sellers who are looking to put their property on the market in the coming spring months.

Ultimately Australia has a low rate of unemployment and more of our international trading is done with Asia, China and India. These are the fastest growing economies in the world and fortunately Australia is rich in iron, ore and mineral deposits.