The Reserve Bank of Australia (RBA) has increased the cash rate to 2.35%, prompting some lenders to increase their variable rates.
Meanwhile, home values have been hit by the biggest national monthly decline since 1983. CoreLogic’s Eliza Owen said it is a sign of how extraordinary the increases in interest rates have been.
But falling property prices can be a positive for potential buyers. The busy spring season is in full swing, so if you are in the market to buy make sure you speak to us about lining up pre-approval so you can move quickly on your preferred property.
At its September meeting, the RBA increased the official cash rate by a further 50 basis points to 2.35%.
It is the fourth consecutive half-point rate hike aimed at curbing soaring inflation, which reached a two-decade high of 6.1% in the June quarter.
This means an increase of about $150 per month for a typical borrower with a variable-rate mortgage of $500,000 over 30 years.
But economists predict the RBA will now shift to smaller rate increases in October and November as it approaches a neutral rate level.
If you’re worried about meeting your mortgage repayments with the recent interest rate rises or you want to review your home loan; talk to us. We’re here to help.
House prices continue to fall across the country, losing much of the gains made earlier this year.
Nearly all cities and regional areas in Australia are now in a decline from their peak property values.
CoreLogic’s home value index slumped 1.6% last month – the biggest monthly decline in almost four decades.
Sydney continued to have the biggest price drop (2.3%) while Brisbane and Adelaide, which had managed to avoid falling house prices, also experienced declines last month.
The price plunge has also spread to regional areas, where home values declined at their fastest rate since 2011. CoreLogic recorded a 1.5% fall outside the capital cities.
“That’s much stronger than what we saw in previous months, and it’s being led by some of the most popular lifestyle areas in the regions, like Newcastle and the Richmond-Tweed area,” Ms Owen said.
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This Spring’s selling season is like no other, with property prices falling in many markets. If you’re ready to buy, talk to us about the right home loan for your needs.
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