Will the Upward Trend in Interest Rates Slow Australia's Property Market Revival?

Tuesday's decision to raise the cash rate to 4.35% is upsetting to homeowners already coping with the significant increase in mortgage repayments over the past 18 months. The November rate hike was widely anticipated, due to higher-than-expected inflation in the September quarter.

While the latest interest rate increase is expected to restrict home buyers' borrowing capacities, some argue that growth in property prices will in fact increase due to factors such as an increase in overseas immigration, and a shortage of house supply

In summary:

NAB states that there will be signs of slowing price growth with this latest rate rise.

AMP states that the recent interest rate hike, coupled with the risk of another increase, may reduce borrowing capacities by about 2%, keeping buyer demand lower, and further slowing price growth.

Commonwealth Bank feels rates will continue to rise in 2024

While rising interest rates pose a potential challenge to Australia's property market recovery, there is also a combination of factors that may continue to drive price increases.

 

Francesca Luccitti
Principal
0430 393 396
[email protected]
www.cumberlandrg.com.au
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