Hi All,
Just thought I would start a discussion on how people feel the rate rise will impact housing prices – if at all? The housing market in Adelaide at the moment is quite hot, and I wonder whether this rate rise (and perhaps subsequent rise later this year) will slow the market at least in the short term?
Any comments welcome!
The rate rise will affect the prices the same way it always done; slow down. Of course; this is an average across the board statement; there will no doubt be areas that defy gravity, and at the top end there are no concerns with affordability – only supply.
The majority of people buying houses are Mr. and Mrs.Thong, on an average income, trying to buy the best house they can afford to impress their family and friends. They want to trade up.
Their finances are running tight all the time – no matter what they earn, so any sort of upward movement in payments on the loan is going to stop these people from trading up.
Then there are the renters and first home buyers; the would-be buyers. The goal-posts just got moved 10 yards further away again; they'll have to save for another 6 months.Bottom line; most people are out of the game due to higher repayments, so the demand stops, prices stop.
The good news; The bottom end has the biggest pool of renters and buyers, so look out for the bottom end housing to go up as the marginalised scramble for something, anything, affordable.
Wont have an impact on the volume of sales. Sales will remain solid and another rates rise will be on the cards before November.
First home buyers will still buy they will just have to move further from the city to do it.
Most first home buyers will be well advised to get into to the market now while they still can, another .25% rise will impact on the serviceability of all.
Owning a property is no longer affordable that's a given. Its all about serviceability as lending tightens massively in the wake of the USA market being slashed about at the bottom and top end of the market.
If the upcoming federal election result is bad (either way) then the doom and gloom will set in.
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