INVESTMENTPROPERTYAUS.WEEBLY.COM

Interest rates are often referred to as the cost of money. Actually, interest is the price you pay, or get paid, to "rent" money for an agreed period of time. Interest rates, and especially the rates on treasury bills and inter-bank exchanges have a significant effect on the value of property. Due to the fact that interests rates play a strong role in the individual's ability to buy residential property (by decreasing or increasing the cost of borrowing mortgage capital), many people assume- albeit incorrectly - that the mortgage rate is the only major deciding factor in property valuation. The truth is, mortgage rates are only one among many interest related factors influencing real estate valuation. Since, investors' preferred rates of return on investments, demand and supply for capital and capital flows are all affected by interest rates, the rates can drive real estate prices in many ways... To understand how real estate prices are affected by government influenced interest..