There is a Wall Street proverb, that nobody rings a bell at a market top or market bottom.
Well…. Looks like that bell may be ringing at the moment for interest rate hikes from the Reserve Bank of Australia.
Negative news about US banks caused the market to quickly price in a stop to the current hiking cycle over the past week.
For the first time in many months the cash rate futures are indicating that the RBA will be pausing and waiting to see what happens from here. Only recently the futures were pricing in another couple of rate hikes.
This situation can change quickly, as evidenced by the events of the current week and markets can always move up as well as down. It’s worth noting this moment in time though, as we may well be at the peak for this current interest rate cycle.
I believe that buying good quality real estate when you can afford it and holding for the long term is a strategy that is solid in all market conditions.
However it’s no secret that real estate buyers and mortgage holders prefer stability with the cost of borrowing capital, or even better, a market where the cost of borrowing is falling at the same times as yields are rising.
