Beneath the dark clouds, there are positives… like rate cuts and cheaper investments!

Beneath the dark clouds of this financial storm, global current account imbalances have been decreasing, global FDI inflows reached a record 1.8 trillion dollars in 2007, oil and food prices have started to come down and emerging economies ─ while slowing ─ are still showing remarkable stability and resilience.

IN a bid to restart the economy, the Reserve Bank has rewritten history by cutting interest rates for the fourth consecutive month.

As widely expected yesterday the RBA delivered households with an early Christmas gift by reducing interest rates by 1% to 4.25%, which is a new 7year low since December 2001.

The last time the RBA made similar drastic moves was in 2001 when rates were cut by 1.25% through three consecutive reductions in February, March and April – followed by a further 0.75% in September, October and December.

INFLATION has fallen the most in six years, sparking expectations that the Reserve Bank will cut interest rates by at least 75 basis points and possibly a full 100 bps.

The TD Securities-Melbourne Institute inflation gauge fell 0.6% in November – the biggest fall since August 2002, after easing 0.2% a month earlier.

According to TD Securities, headline inflation has decreased to 3% from 3.9% in October, whilst underlying inflation excluding items with large price movements tumbled to 2.9% in November from 4.1% a month earlier.

Interest rates are now officially 3% lower than they were in March this year at 7.25%.

ANZ Bank’s head of Australian Economics and interest rate research Warren Hogan expects that by mid next year interest rates will fall to 3.50%.

It’s just getting cheaper and cheaper to secure investments! Might be a good idea to have an investment property that will be completed within a reasonable period especially if you wish to enjoy declining rates and be in a position to fix it before they go up again eventually.

Last year, one of our investors who was prepared to meet the shortfall on their investment of around $320 per week, is now enjoying spending less than $165 per week to own that same $400,000 investment property.

One could almost own 2 houses for the price of one! Imagine how little an investment will cost when rates drop even further. Like the idea of buying a house for $120 per week?

Learn when you can get into a position to tap into this opportunity! Schedule a free consultation with KlearPicture to find out.

The team at KlearPicture