A recent Canstar survey shows 29 per cent of Aussies would support an official interest rate rise if it put the handbrake on property price growth, reports realestate.com.au.
This comes as CoreLogic data showed half of Australia’s capital cities clocked price growth of more than 20 per cent in the past year.
So will a rate hike cool the property market?
Higher rates typically mean buyers can borrow less so if we move into a higher interest rate environment we could see growth slow, or prices flatten. Fewer experts are tipping prices will drop.
But economies and property markets are tricky things to predict in the short term. Those that remember previous Brissie booms might recall a time when wage growth, fuelled by a surging resources sector, spiked property prices … at a time when interest rates were also rising.
But for the most part, experts are tipping the days of record low interest rates are numbered and property prices will start to reflect that.
So, if you’re a buyer, set your budget to plan for interest rate rises in the years to come. Getting independent financial advice is also a good step if you’re weighing up the benefits of a fixed vs a variable rate home loan.
If you’re a seller, you won’t see too much change just yet, so now is still a good time to take advantage of ongoing demand and healthy capital gains.