Three year fixed rates offered by some financial institutions are dipping to below five percent, setting up the perfect opportunity for Australians to invest in property right now. Analysts and market experts strongly believe that the rates are touching bottom at this point. Given the slow yet steady return of confidence that the Australian real estate market has been witnessing over the recent months, investors are best advised to move in right away before property prices begin to rise.

Lock in a Fixed Rate Loan

Now is the time for investors to take out a fixed rate loan, locking in their interest payable at this all time low figure. By doing this, the investor not only keeps his net outlay for his home at a minimum, he also protects himself from further interest rate increases. There are some reputed lenders offering two to three terms fixed rates at 4.79% clearly showing why this is the right time to buy property with fixed rate loans.

Interestingly, many existing home owners who are still paying off a variable loan are sticking to their loan program rather than switching to a fixed loan. Evidently they believe that a further fall in interest rate is not out of the question. But experts state that this may be a huge mistake especially since a further fall does not seem likely. Traditionally, variable loans are the most popular in Australia. It appears that buyers are finding it a challenge to go against this norm now even when fixed rates are clearly the more favorable.

RBA Not Likely to Cut Cash Rates Further

According to Paul Bloxham, HSBC economist, the Reserve Bank of Australia is not likely to bring borrowing costs any lower than they are now. The cash rate stays at 3% now, where it was fixed in December. John Kolenda, Managing Director of 1300HOmeLoan, reiterates this belief saying that fixed rates are unlikely to dip further. The time is definitely right for Australians to buy real estate now without paying up a fortune in loan costs. Waiting any longer may only prove to be a mistake for buyers.

Low End and Medium Properties are Best Choice for Investment

Across Australia, the low end and medium price properties are the ones garnering the most attention right now. While high end luxury properties are finding a few buyers in some specific pockets, it is difficult to gauge exactly which ones will win the favor of the market. In effect, it makes better investment sense to identify low end or medium properties in locations like Queensland and New South Wales where buyer activity seems to be increasing week after week. However, it is also important for buyers to close their deals quickly before the slowly increasing demand pressures price increases in the market making these properties unaffordable.