It now looks like interest rates aren’t going to budge – either up or down – for a while.

They were supposed to imminently begin to fall because most of us have started hibernating and stopped spending. But the petrol price spiked even before the tensions in Gaza escalated, and there are fears gas and electricity prices will keep pushing up too.

Also by Nicole Pedersen-McKinnon:

• $456 a month: The loan that will slash your mortgage repayment

• The 10,000 pets suffering in our cost-of-living crisis

• 5.5% savings rate: Where to find the highest interest in 11 years

Which way inflation - and, therefore, interest rates - will go next is a finely balanced thing.

So, if you have any money looking for a home, where – under these interest-rate and economic conditions – is it best to invest? Which options will flounder… and flourish?

Investing in the share market

What’s happening today: After a really shaky period where the Australian share market fell to a low not seen for seven months, shares have begun slowly rising again.

Share markets hate rate rises – just like they squeeze our finances, they pressure companies’ finances too. Last week, they appeared to get their mojo back on indications interest rates in the US might have peaked. But they then fell on Friday when higher-than-expected US inflation figures renewed prospects of a fresh State-side rise.

Long-term prospects: Shares are – effectively – on sale… they stand 7 per cent lower than the high at the end of January, which was very close to the all-time high in mid-2021 after the COVID recovery. But the conflict in the Middle East could weigh further on the market, particularly if Iran becomes involved.

On the flipside, a potential positive for returns is a possible stimulus package for economically embattled China. Now may be an opportunity for long-term investors to buy in on the cheap, with a diversified – so, spread – portfolio or diversified listed fund if you have only a small amount of money.

My top tip: Google "exchange-traded funds" or "ETFs". Remember though, if the cost of living means you have limited means, you should already have 11 per cent of your salary going into diversified market investments within your superannuation. So, your investment priorities might be elsewhere.

Investing in property

What’s happening today: After big interest-rate-induced falls in many areas, prices are back at their previous highs. The five biggest capitals are up a combined 6.3 per cent in the past year, according to the CoreLogic Daily Home Value Index, with Perth (9.4 per cent), Sydney (8.2 per cent) and Brisbane (6.4 per cent) growing the most. So, here, the ‘discounting’ may have all but disappeared. Having said that, rental vacancies are at almost zero, meaning rents are sky-high, so the income yield offered by property is still often significant.