Will there be three rate hikes ?

| September 22, 2009

Alan Oster, group chief economist at National Australia Bank, said a string of positive economic data will force the RBA to move earlier than expected to raise rates.

While the Reserve Bank of Australia (RBA) left interest rates on hold this month, it will raise rates in November, December and February, according to a leading economist.

If rates rose to 5.5 percent, the monthly repayment on a $300,000 mortgage would rise by around $420.

Rate hike australia

Property prices across Australia have jumped almost 6 percent this year and will continue to rise even in the country’s most expensive suburbs, experts said today.

The average Australian home has gained $28,194 in value since January this year and is now worth almost half a million dollars at $477,865, according to the RP Data-Rismark Home Value Index.

Property prices rose in every mainland capital city, with Melbourne and Sydney enjoying growth of 8.5 percent and 6.6 percent respectively, over the last seven months, while Brisbane and Adelaide clocked 3.8 percent and 1.9 percent rises.

Meanwhile, prices in Perth showed signs of recovery with a 2.5 percent rise, values in Canberra climbed 5.4 percent and Darwin homes stormed ahead with a 10.8 percent rise over the same period.

In its latest assessment of the Australian economy, the International Monetary Fund (IMF) warned that Australian house prices are overvalued by up to 20 percent and that low rates, government subsidies and ongoing strong immigration will continue to push house prices higher.

However a “sharp fall in house prices” remains a risk.

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Category: bank rates, Interest rate hike, property outlook

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