Latest NewsTime to Buy 'hots Up' As Interest Rates, Economies CoolWednesday, 22 February 2017

As a property investor the question that is always front of mind is: what is going to happen to interest rates?

The Reserve Bank's decision to leave them on hold is a clear sign it believes the earlier increases have had the desired effect and cooled the property market.

The Reserve is in a bind, with one eye on the property market and another on the broader economy. Raise interest rates too much and the economy falters, not enough and property prices grow too quickly.

It is unlikely we will see many more interest rate rises this year. In fact there is a slight chance we may even see a reduction if we continue to see global economic uncertainty, particularly in the European economies.

Contrary to popular belief, global instability can be good news for property investors. Many people mistakenly believe that when the global economy is shaky this will have a negative impact on the Australian property market but nothing could be further from the truth.

The fact that Europe is going through hard economic times and there is a fear of a double-dip global recession means there will be downward pressure on interest rates or at the very least interest rate stability.

Interest rates are still at reasonably low levels and I believe this stability will give property investors confidence to re-enter the market in the second half of the year.

This increased demand from investors is unlikely to result in significant price growth, however, because it will be evenly matched by an increase in supply of property for sale. Because of the recent strength in the market many property owners who have been holding off making their move will view the second half of the year as a good time to sell.

The combination of a stable interest rate environment and a good level of supply means there will be more opportunities for property investors.

The heat will be taken out of the market and investors will not feel the pressure they did in the first half of the year. They will have the time to "pick the eyes out of the market".

Many property investors try to pick the market cycle but never actually buy anything because it is not the "right time".

When the market is strong they rationalise now is not a good time because prices are too high. But when the market is weak they fear that prices will fall.

This procrastination means they never achieve their investment goals. I believe there is never a bad time to buy a good investment and never a good time to buy a bad one.

For property investors the perfect time to buy is when it is right for your individual circumstances and when the opportunity presents itself. The second half of this year will bring many opportunities: the question is, is it the right time for you?

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