Interest rates are likely to fall before they rise again, giving more hope to home-buyers and investors seeking to enter the property market, according to a senior researcher at Bendigo and Adelaide Bank, the nation’s fifth largest bank.

David Robertson, the Bendigo Bank’s Head of Economic and Market Research, told a Deakin University Alumni event that indicators showed low interest rates would remain a feature of the economy for the next five years.

His prediction is generally in line with most economists, who expect another two reductions to the official interest rate in the next six months, with some predicting the Reserve Bank will announce another decrease at its October board meeting.

“When you consider we’ve got a 1% cash rate and it’s pretty likely we’ll get down to half a per cent at some stage next year, gearing when interest rates are low makes sense,” Robertson says.

“It looks like a long, steady period of low inflation and low interest rates. That’s difficult for savers and retirees, but for housing we’re facing four to five years of low interest rates and that’s clearly going to have a positive impact on the ability to borrow.”

Robertson says new finance data showed first-home buyers are more active now.

“Housing finance data shows a sharp rebound for owner-occupiers and investors but the largest is first-home owners,” he says.

ABS data shows the number of loans for owner-occupier and investment buyers has risen for consecutive months, but the number of loans to owner occupier first-home buyers has risen for the past four consecutive months.