[Rewards] How Interest Rate Hikes Affect Real Estate?
Hey Aussie,
After a period of silence from the big four banks since the central bank’s rate rise on Tuesday, $澳洲联邦银行(CBA.AU)$ is raising mortgage rates by 0.5 percentage points, and it will raise rates on a key savings product by the same amount.The change will take effect from August 12.
Property prices are going down marginally as cost of living pressures bite but they still remain high levels compared to pre-pandemic levels. House prices are just 1.66 per cent below their peak in the later half of last year.
According to PropTrack’s Home Price Index, released on Monday, home prices dropped 0.43 per cent nationally in July. Would you like to share your opinion regarding How interest rates affect the Housing Market？
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⏰Activity Duration
- 4 Aug, 2022-11 August, 2022
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The Australian Residential property prices have recorded the strongest growth last year, rising 23.7%. This astronomical growth was spurred by record low interest rates and government stimulus.
But now things have changed drastically as interest rates are rising. When interest rates rise, house prices fall because the subsequent rise in mortgage payments reduces demand from buyers. People are less willing to begin a bigger mortgage, fewer people want to buy and house prices drop until interest rates fall again.
The property market is cyclical but not all properties are created equal. The key word when looking to buy houses is "Location, Location, Location."
So houses in prime location which are close to good schools, shopping amenities, transportation within 10km to the major cities in Australia, will hold their prices much better.
So while interest rates are a major component of the real estate markets, location is very important too.
@Tiger_AU @TigerStars
那么加息是希望对需求端做出的影响，如果经济问题来自于需求过剩，那么会有帮助，但如果问题来自于供给不足，那么这样的方式是否能够标本兼治，将会被打上一个大大的问号。