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The Relationship Between Inflation and Housing Prices

Mortgage brokers Melbourne

Inflation is defined as an increase in the prices of goods and services as a result of a decrease in the purchasing power of money. A high inflation rate means more money moving around more quickly, instantly increasing housing prices. So, if you are looking to buy a house in Melbourne and are worried about the rise in interest rates, it may be the right time to seek the services of mortgage brokers in Melbourne.

The Australian Bureau of Statistics uses the Consumer Price Index to analyze the changes in prices of items in various categories and calculate the current inflation rate. Although the average target inflation rate of the country is 2-3%, it reached 3.8% in Q2 2021, demonstrating a 12.5 year high. However, the inflation rate fell to 3% in Q3 2021.

How Does Inflation Impact Housing Prices?

Housing prices usually rise with inflation because of the increase in interest rates. Thus, housing is considered a good asset during periods of high inflation, as its value continues to soar in the market.

It is also important to understand that the inflation rate highly influences the decision of the RBA to adjust the cash rate. The authority may decide to increase or decrease the cash rate to meet the inflation target, which plays a crucial role in determining the interest rates for home loans in Australia. 

If you are a prospective homebuyer, the increase in inflation rates may make it difficult for you to save up for the 20% down payment on the property.  However, you have nothing to worry about if you have already paid the deposit and taken out a fixed-rate mortgage, as most mortgage brokers in Melbourne recommended.

Since inflation only impacts the cost of the house, the amount you pay for your home will remain the same, but its value will increase.

Speak With Mortgage Brokers Melbourne Today!

Whether you are planning to buy your first home or an investment property, mortgage brokers Melbourne can help you understand more about inflation and its effect on housing prices.

To learn more about the fixed-rate mortgage and if it is the right choice for you, please get in touch with Opulent Finance today. Our experienced mortgage brokers will do all the legwork and provide you with expert financial guidance on the current inflation and interest rates.

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Siraj Ahmed
Siraj Ahmed
2020-11-18
Verified review
Excellent service. Got us a great loan option and also worked with the bank to get the loan approved during the heights of COVID.
Dhruv Satra
Dhruv Satra
2020-11-18
Verified review
Malaka Ekanayake
Malaka Ekanayake
2020-11-10
Verified review
We have had a very pleasant experience working with Opulent Finance. We did not have that much experience with house loans as we were first home buyers but working with Opulent  Finance team specially with Ishara, made that experience stress free one. She helped us secure an incredibly competitive interest rate and offered her guidance so we can take advantage of the future interest rate drop. Thank you Ishara, Dayan and team for your incredible support and we have no hesitation what so ever in recommending Opulent Finance for your financial needs
Uma Gunaratne
Uma Gunaratne
2020-11-04
Verified review
Ishara is highly knowledgeable and if you are a first home buyer and new to the intricacies of all that home loans entail, she will really take you under her wing and impart her knowledge and experience and treat you as one of her own. She is also extremely patient but will also be very truthful and upfront in situations which is honestly what you need. She did a very complicated loan for us, and was so incredible efficient and organised with all the paperwork that was required. Not only that, she helped us secure an incredibly competitive interest rate! Ishara has probably spent hours and hours explaining to me details and giving me really good guidance through this momentous period in life! During the cooling off period and settlement, she was constantly chasing up our loan and honestly took a personal interest in the outcome. Our solicitor was also very happy about working with Ishara as she was following the entire process, was always up to date and very easy to work with. Considering that our entire process happened during the covid-19 lock-down and work from home environment, we have nothing but good things to say about how professional Ishara was as she didn't let a single thing slip. We are so glad that we have both Ishara and Dayan in our corner. We will definitely be using them for all future financing needs. Thank you Ishara, Dayan and team!
Harsha Ill
Harsha Ill
2020-10-11
Verified review
Opulent Finance gave professional advice for my unique home loan requirement. They respond quickly with the proper information. The process was smooth and I felt comfortable to deal with the team. The team is friendly and professional to deal with. Highly recommended for any one looking for finance.
S P
S P
2020-09-22
Verified review
I have been dealing with Ishara at Opulent Finance for over 6 months now and she has been faultless. She has helped me secure a loan pre-approval in no time and assisted me with my property purchases. I could not recommend Ishara highly enough.
Afshin Koohestani
Afshin Koohestani
2020-09-22
Verified review
Good service and offers.
Janaka Kumara
Janaka Kumara
2020-08-22
Verified review
A big shout out to Dayan and his team for the seamless service provided during the refinancing process. Thoroughly professional team that pays attention to every detail and has been extremely transparent throughout the process. A team that always has the best interest of clients in mind and makes all efforts to provide the right advise and outcomes to the clients. Highly recommended!
Rakesh Mistry
Rakesh Mistry
2020-08-19
Verified review
They called me back with solution
Indra Jaya
Indra Jaya
2020-08-12
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