Are there any implications for such a move for people who own assets / are looking to invest? Except of course the dollar is rising
Original publication date on the United States Real Estate Forum on Facebook:
2018-12-22T22:40:33+0000
Are there any consequences to such a move for people who own assets / are looking to invest? Except of course the dollar goes up…
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http://bit.ly/2G4tx9b
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As one who holds assets or is looking to invest in the interest rate increase, you will assume that you have loans to finance the property and that your monthly loan variable interest rate will go up.
In addition, if you wish to purchase additional property and wish to use external financing (debt), debt costs will be higher even if it is a bank loan and other external financing sources, as the interest rate for each loan is derived from the central rate set by the central bank (plus a risk premium determined by a client and varies between givers One credit to another).
Another thing to be aware of is that due to an increase in interest rates, it actually increases the interest rates on mortgages, which can cause less motivation on the part of a person who wants to purchase a residential property with a mortgage to take out the loan and this may cause a decrease in demand for the purchase of apartments.
Of course, like everything in economics, these are processes that often take a long time for the market to digest its change and consequences.
Ultimately, a 2.5% interest rate is in the range that is healthy for the economy (of course this is a general statement and additional macro data such as unemployment rate, inflation etc) should be considered.
Hi Gal. The main implications are the cooling of the market. Less transactions because interest rates are less attractive.