If you’re in the market to build your dream home in Western Australia and you’ve already been looking at house and land packages in WA then it’s fairly likely you have done some research into how interest rates work and will affect the final cost.

By staying apprised of general economic news and trends you can determine whether interest rates are likely to rise or fall, and how that is likely to affect the value of your investment, but it can be a daunting task to the newcomer.

Fear not, you’re in safe hands – at Residential Building WA our financial experts can help you to make an informed decision based on the interest rates and their influence on the housing market. As a team of highly experienced, trustworthy home builders in WA you can rely on us to always give you the best advice for your particular situation. 

Australian property values are closely tied to interest rates

Interest rates in a free market are set when public or private lenders compete for the business of home buyers. The ferocity of the competition and other affecting economic factors cause the interest rate levels associated with mortgages to move up pr down accordingly. When the reserve bank slashed the interest rate to its lowest ever level of 0.1% it did so in order to prop up the Australian economy and promote increased lending and spending. This level cannot last forever, and the only direction it can move is upwards, probably gradually, but inexorably. 

When interest rates are low it becomes more affordable for potential buyers and builders to obtain finance and lenders will often offer tempting incentives to do so. Consequently, those people who may have been uncertain about the wisdom or affordability of purchasing property or building from scratch are much more likely to take out one of the myriad home loans available and invest in real estate. They are wise to do so as it represents the perfect opportunity to buy or build at a much more affordable level. 

The butterfly effect

No movement or change in the world of finance is ever without its direct effect on something else so the increase in demand leads to rising values as properties are purchased and available ones become more difficult to find. The inverse is also true as people are reticent to take mortgages out on properties when interest rates are high and will cost them more in repayments. Property values stop climbing as a result, perhaps even falling, and this is why it’s important for potential buyers to seek the advice of expert home builders in WA before making any final decisions. Residential Builders WA have a team of dedicated professionals ready to advise and guide you. 

When the rates are low and look like staying so for the foreseeable future, a situation that Australia finds itself in today, then smart investors take advantage and buy or build. If they have chosen a fixed-rate mortgage or one that financially incentivised them to sign up then it should, in theory, be a no-lose situation. If the interest rates rise then they are already locked into an agreed lower rate or have benefitted from that signing-up bonus. If the rates stay low then the value of the property inevitably rises and they are now in a stronger position. No matter the angle you choose to look at it from if you’re thinking about buying or building your own home in the near future then don’t delay, the time is now. Talk to our experts at Residential Builders WA and browse through our house and land packages in WA and you will find yourself getting into the market at the perfect time.

Alternative contributing factors to interest rate levels

It’s important to remember that interest rates are not the only contributing factor in determining the cost and potential profit-acquiring opportunities of purchasing real estate. Everything from a sudden interest in a particular location (perhaps due to businesses opening premises there and requiring new workers) to general population movement trends as social dynamics change and grow can impact home prices and availability. 

The importance of a healthy economy

At the end of the day, all investments are subject to the ebbs and flows of the market and its complexities. Recent events are unparalleled in living memory and so in some ways, all bets are off in terms of the bigger picture. There are scenarios and computer models that will show that housing prices have a direct, unbreakable correlation to the mortgage rate, and that is fine, but what is also of vital importance to this is the general health and overall strength of the supporting economy. That is where we are now on rather less certain ground, but we can be sure that the Aussie spirit will surge again and the economy will return to its booming best. 

importance of a healthy economy - build your dream home in Western Australia with RBWA

What this means for buyers 

With those interest rates sitting pretty close to rock-bottom right now there could not be a better time to start the journey of a lifetime and engage the services of highly reputable home builders in WA. There are, of course, several considerations to be looked at before taking the plunge, but it cannot be denied that getting into debt in Australia has never been cheaper.

The team at Residential Builders WA pride ourselves on our excellent, long-standing relationships with some of Perth’s top financial specialists and are confident that we’ll be able to find the financial provider and product to suit you perfectly.

Our commitment to you 

As conscientious, thorough home builders in WA, we offer professional tailor-made services to all of our clients, with the understanding that each person’s situation is unique. Residential Building WA’s commitment to you is that we will start you down the path of your life-changing home building journey and give you all the help and guidance you need along the way.

If you have any questions or comments or are ready to discuss our house and land packages in WA then get in touch today and talk to a dedicated member of our team. They can answer all your questions and discuss your particular situation in detail. 

  • This field is for validation purposes and should be left unchanged.