Rents and interest rates 'won't be around forever'

Mozo

Thursday 30 April 2009

The interest rate cuts enacted by the Reserve Bank of Australia (RBA) have spurred a flurry of activity in the Australian property market and spurred many people to consider investing in property to let.

So too, the shortage in rental property has pushed rents up to record rates, making becoming a landlord seem a fairly smart option.

But the Sydney Morning Herald has warned anyone who is considering doing so to remember that this situation won’t last forever.

"In a year or two we can imagine that interest rates will have stopped falling. Then, with all the stimulus packages and the borrowings from the government we could possibly see a resurgence in inflation," warned Rory McLeod, the national director of research at Colliers International.

This, in turn, could push interest rates up and put real strain on homeowners and landlords alike.

Elsewhere, Satyajit Das, a risk consultant and author of Traders, Guns & Money, has told the Herald that we may see unemployment soar in the coming years, something which could put a real strain on Aussies trying to pay off their home loans.

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