House price falls will accelerate across Sydney and Melbourne and could even spread to the other capitals such as Brisbane and Adelaide where prices are still rising, after the Reserve Bank raised interest rates by 0.50 per cent, experts say.
House price falls will accelerate across Sydney and Melbourne and could even spread to other capitals including Brisbane and Adelaide where prices are still rising, after the Reserve BankRecent homeowners, especially those who have taken low deposit loans are also at risk of falling into mortgage stress in the next three months as interest rates continue to rise.“The higher-than-expected rate rise is now getting beyond our assumptions,” said Louis Christopher, SQM Research managing director.
“Property owners who want to get in now obviously will have their expectations dashed because as rates go higher, it gets more and more difficult to borrow the amount they need,” he said.‘Painful for those who got in recently’and could face difficulties in servicing their mortgages, Dr Oliver said. Dr Oliver still expects house prices to fall between 10 per cent and 15 per cent peak to trough, but the bulk of the decline could occur in the next few months.
The shock of the larger than expected rate hike could drag demand and housing activity even lower, said Tim Lawless, CoreLogic research director.“Considering confidence and housing activity are highly correlated, a further dip in sentiment would likely be accompanied by further downwards pressure on housing activity and housing prices,” he said.