Rate rise could wipe 15 per cent from home prices: RBA

A 2 percentage point lift in interest rates could knock 15 per cent off the value of Australian homes, the Reserve Bank has warned while telling people who have taken out huge mortgages over recent years to start bracing for an increase in their repayments.

Economists at the nation’s leading banks expect the RBA to start lifting interests from a record low 0.1 per cent at its June 7 meeting and follow that up with at least three more increases by year’s end. They all think the cash rate will be 2 per cent or higher by December 2023. A full percentage point lift in mortgage rates would add almost $500 a month to the repayments on a $600,000 loan. Taking the cash rate to 3 per cent or more would increase repayments by $1500 a month or $18,000 annually.Campaigning in Victoria, Mr Morrison said there was “no doubt” pressures on the economy had increased but the Coalition was the only party able to handle them.

Mr Albanese, campaigning in South Australia, said the threat of higher interest rates emphasised the need to deliver policies that permanently reduced cost-of-living pressures.“We are being modest at this election, we are not promising to change the world. We are being “Increases in interest rates – which are anticipated by market participants over the next couple of years – would result in higher debt repayments for many households and businesses, but most are well-placed to absorb these,” it said.

Another fifth would face a lift of no more than 20 per cent while a quarter would have to deal with a 30 per cent increase in their monthly repayments.

swrighteconomy Oh no, the prices will lose a year of accumulated value. What ever will we do?

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Rate rises could cut 15 per cent from house prices: RBAHouse prices could fall 15 per cent if interest rates rise 2 percentage points, in line with market expectations, the Reserve Bank has warned. you say that like it’s bad thing :) That would be bad for people who end up in negative equity. But as a home owner, I'd be thrilled if fewer investors and more regular people could buy I'm my suburb.
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Heavily indebted borrowers should brace for a 15 per cent fall in home prices as interest rates rise, warns RBAThe Reserve Bank is confident most borrowers will be able to cope with rising interest rates, but it also warns recent buyers in particular should brace for falling property prices. The banks are holding back an interest rate rise until after the election. They know it's inevitable Cryptocurrency is a direct threat to the Federal Reserve Bank, Australia ties its wealth to law via currency, so what happens when a global unauthorized currency replaces it? Wealth is freed, and justice is bankrupted... There’s some pretty good (low) stats showing our Banks have been prudent in lending & people haven’t borrowed excessively You buy a home to live in, to enjoy, not to look at the market value on paper every day. Interest rates are rising globally. Hopefully, wages will start ⬆️
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