Invest
How to navigate property, according to the RBA governor
It’s nearly inevitable; rates are going to go up before they go down. But that doesn’t mean home owners and prospective borrowers should panic, the Reserve Bank of Australia has said.

How to navigate property, according to the RBA governor
It’s nearly inevitable; rates are going to go up before they go down. But that doesn’t mean home owners and prospective borrowers should panic, the Reserve Bank of Australia has said.

Provided the Australian economy continues improving, the next rate move will be up, RBA governor Philip Lowe said on Tuesday.
Speaking to mark the launch of a national financial literacy strategy, he said there are four key things home owners need to know before they decide to buy.
“We all need to plan. For our own sake, and that of our families, we need to do this as well as we can. If we go in the wrong direction, it can have a major effect on our families and our welfare, perhaps for years. So it is really important we make well-informed financial decisions,” Mr Lowe said.
1. Rates might be going up, but they will also go down
“It is nearly eight years since the previous increase in interest rates by the RBA. This means that many borrowers have never experienced a rise in official interest rates,” he said.
But, this is going to change and this is good news. However, borrowers need to be prepared.
2. Housing prices also fluctuate
“Most of our cities have seen falls in housing prices at some point over the past decade. While I would expect housing prices to trend higher over time as our incomes increase, there is no guarantee that your home will be worth more tomorrow than it is today,” Mr Lowe said.
“So plan accordingly.”
3. Build buffers into your plans
He said buffers are essential for all Australians, adding that it “rarely makes sense” to take all the credit offered whether on a credit card or home loan.
“Many Australians with mortgages find the best way of building buffers is to put any spare money into their offset account. This makes a lot of sense,” Mr Lowe said.
4. Shop around
Borrowers shouldn’t be shy when it comes to asking for better deals on their financial contracts.
“There are very good deals out there if you look. We can all play a role in making our markets more competitive by being smart and informed in our choices,” he said.

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