Rate Rises and Real Estate Prices
Last week the Reserve Bank of Australia (RBA) met for the final time this year and implemented another rate rise in line with expectations of 0.25%. This concludes eight consecutive rate rises in eight months, taking the cash rate from 0.1% to 3.1%...
Last week the Reserve Bank of Australia (RBA) met for the final time this year and implemented another rate rise in line with expectations of 0.25%. This concludes eight consecutive rate rises in eight months, taking the cash rate from 0.1% to 3.1%. The next meeting will not be until 7 February 2023 so borrowers will now have some time to adjust to the new mortgage repayments they are experiencing.
The expectations for 2023 are somewhat unclear at this stage until more data comes out with regard to inflation and employment. Overseas rates were still rising faster than here with both US and UK reserve banks opting for 0.5% rises in December, taking their cash rate to 4.5% in the US and 3.5% in the UK. However, inflation in both these countries is much higher than in Australia.
So why do we focus so much on interest rates when talking about real estate? Well, the two are very closely linked and, in general, rising interest rates lead to real estate prices declining and decreasing interest rates lead to real estate prices increasing. To prove the point, Sydney prices are reportedly down 10% since rates started rising and our area is currently under the same sort of pressure.
Having said all the above, there were some great sales in the last week or so:
- 40 Squires Crescent, Coledale sold for $3,390,000 by Andrew Hedley at One Agency Thirroul
- 30 Foster Street, Helensburgh sold for $1,070,000 by Ron Kissell at Ray White Helensburgh
- 69 The Ridge, Helensburgh sold for $980,000 by Ron Kissell at Ray White Helensburgh
- 14A Clyde Close, Thirroul sold for $2,100,000 by Laurie Johnston at McGrath Thirroul
Ian Pepper is a real estate agent and finance professional
