The Reserve Bank of Australia lifted interest rates for the first time in 11 years on Tuesday, and the RBA rate is projected to continue to rise rapidly throughout the remainder of the year.
Is this significant in the real estate business? Yes, for two connected reasons.
To begin, national housing values have increased by 35% since the pandemic began. Even if interest rates were not increased, this rate of growth would be impossible to sustain.
Prices climbed in response to decreasing borrowing costs – a process that is nearly complete.
Second, and related to the preceding, Australia’s total price increase has already decreased. Numerous buyers and sellers draw cues from previous market performance, and the fact that growth has slowed significantly implies that prices will continue to be weak.
As a result, the expectation for an RBA rate hike is for continued flat or slightly declining prices.
However, much can change in terms of both the rate at which interest rates rise and the rate at which wages expand. While both remain uncertain at the moment, this interest rate hike will influence the real estate market as well!
Sapphire Queensland understands the suffering of the homeowners and potential buyers due to this change. We can assist you in making the right decision at this time before it’s too late.
