What does the cash rate mean for investors?

By Greg Bell

When looking at purchasing commercial property for sale on the Gold Coast, securing a mortgage is often top of mind. Unless your portfolio is looking extremely healthy and you have substantial capital, you will need to borrow to take advantage of the outstanding potential gains available.

The official cash rate influences the amount of interest lenders charge on their finance, so the ups and downs are always of great interest to anyone in the property industry.

If you've been living under a rock, you won't be aware that the Reserve Bank of Australia (RBA) dropped the cash rate to a historic low of 2 per cent, back in May. This resulted in many lenders decreasing their rates for loans, making Gold Coast commercial real estate more accessible to investors.

The RBA cash rate statement for the month of August has heralded more positive conditions for those looking at buying commercial property on the Gold Coast.

Steady as she goes

RBA governor Glenn Stevens made the announcement that the cash rate will remain at 2 per cent, for another month at least. This will likely continue to support the thriving property industry and lead to positive flow-on effects to the national economy.

Mr Stevens said that the cash rate is acting to support lending, and has been reflected in strong growth in borrowing by businesses of late. Thus, it's good news for those eyeing up commercial property for sale on the Gold Coast as there is a further month of favourable interest rates.

"In other asset markets, prices for equities and commercial property have been supported by lower long-term interest rates," Mr Stevens said.

This effectively means you have more time to consider industrial property on the Gold Coast. With the help of a local real estate agent, you will be able to make an informed decision.

How long will the record interest rates last?

While the rates are currently ideal for businesses or investors looking into commercial property on the Gold Coast, all good things must come to an end. Just when that happens, however, is anyone's guess. The August RBA statement asserted that any changes further down the line will be determined on the situation with the Australian economy.

Governor Stevens seems pleased with how the nation is progressing, indicating the current rate could be around for some time yet.

"While the rate of growth has been somewhat below longer-term averages, it has been associated with somewhat stronger growth of employment and a steady rate of unemployment over the past year," he said.

Buy commercial property on the Gold Coast

With all this in mind, what's the best action to take? If you're interested in commercial property for sale in Surfers Paradise or the Gold Coast, you should strike while the iron is hot and make the most of the beneficial interest rates.

While there are indications the rate may stay steady at 2 per cent for a while yet, you can never truly know. The last thing you want to do is speculate too long and end up missing out on the easier repayments!

If you are considering taking the step into purchasing commercial property on the Gold Coast, talk to the team at Ray White. We can work with you to help find the most fitting real estate in terms of your financial standing, future plans and target market.

With clients spread across the world, we strive everyday to ensure that your business goals are reached.

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