Often spoken about first home buyers are one group in Melbourne’s property sector that could well have been hoping rates were actually hiked.
With rates staying low for an extended time, the heat has remained in Melbourne’s property market making it more difficult for some first-home buyers to get themselves on the property ladder while prices continue to lift the ladder higher.
Senior economist at Domain Group Dr Andrew Wilson told The Age however that interest rates would have to at least double to start taking the heat out of the property market.
“First-home buyers would be cheering for a rate rise, at the moment they’re having to save $400 every week just to keep up with prices growth – not to mention saving for a deposit on top of that,” he said.
If some first-home buyers are crossing their fingers for rate cuts, Angie Zigomanis from BIS Shrapnel says they might be waiting a while.
Mr Zigomanis told The Age increases to the official cash rate are not expected until the second half of 2016, and house prices aren’t expected to ease until then.
Hocking Stuart chief executive Nigel O’Neil also spoke to The Age and said prices would eventually start to come down when the RBA did move rates upwards.
Interest rates are at historical lows, so going any lower is unlikely to have much more of a stimulus than already occurring,” he said.
Ben Handler from Cohen Handler buying agency said rates are very low and people are willing to take on debt, and that prices will keep rising until the RBA hikes rates.
“An increase in interest rates has the potential to reduce the competition in the property market, thereby increasing the opportunities for first home buyers,” he told The Age.