Rate rises and price drops are on most homeowners’ minds since the Reserve Bank jacked up interest rates by 0.5 per cent.
Many economists believe borrowers will soon be paying interest rates of over four per cent. But now is not time to panic.
CBA economist Gareth Aird says today’s rates of about 2.5 per cent would still slow the economy and inflation markedly over the next year. And that the rate rises forecast by other economists will have a huge impact on the market.
In fact, CBA reckon rates will actually be dropping by the end of 2023!
If you want to discuss interest rate options, please contact your Origin broker on 1300 30 67 67.
This week, CBA predicted an 11 per cent decline for Sydney house prices this year, a 10 per cent fall for Melbourne, and an 18 per cent slump in both cities by the end of 2023.
These falls, follow May’s Sydney house prices falls of 1 per cent according to Corelogic.
But is this a disaster? The market fell by about 10 per cent between 2017 and 2018 – since then, we have had record growth.
Undoubtedly, Australians will have to tighten their belts for a few years.
But a 3.9 per cent unemployment is a national best – and wages are likely to rise accordingly.
This, plus the savings buffers many of us have built up, means most of us will be able to weather the storm.
Many banks are still keen for home loan business. One Big Four bank announced this week it was offering 300, 000 Frequent Flyer points to new customers.
Now maybe a good time to refinance, to get a lower interest rate and deal with the next 18 months.
If you are concerned abut your ability to make home loan repayments, please contact your Origin broker today on 1300 30 67 67