Sensationalist Headline on Interest Rates.

10.30.06 Posted in News by Mathew

I was reading an article on The Age website about interest rates. With a headline like “Rents forecast to soar higher after rate rise”, you would expect some dire predictions from industry pundits, along with some facts and figures to back them up.

Yet the very first line of the article reads “Rents could go higher”. Could? that hardly sounds like a prediction of soaring rates to me. They say rents have risen in the september quarter at their highest rate for 15 years; A scary sounding statistic to be sure, but they go on to say that they have risen by a mere 3.4%. Considering rents have been flat for many years, over the longer terms have actually gone down (when compared to inflation).

Rents are not going to “soar”. Sure, they may continue to go up, but I don’t see a reason to start to panic just yet.