Rate Rise Won’t Dent Prices
The November interest rate rise increase is unlikely to dampen the pace of property price growth, according to industry analysts.
PEXA chief economist Julie Toth says prices may drop temporarily but they will also rebound just as quickly.
“We may see a welcome pause in price increases, but I doubt we’ll see another fall. On the flip side, we’ll probably see a burst of activity in refinancing,” Toth says.
CoreLogic research director, Tim Lawless, thinks price drops are unlikely, although he says confidence may take a slight hit.
“While the decision could prompt an increase in listings of owners forced to sell and weaker demand from would-be buyers now able to borrow less than they could before, the rise was not enough to trigger price falls,” he says.
“The still-burgeoning undersupply should keep a floor under housing to some extent. At least for the medium term this probably means more that price growth will continue to slow but remain positive rather than move into negative territory.
