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Despite the frustration of homeowners over interest rate increases, experts predict a dramatic decline in house values

 Despite the frustration of homeowners over interest rate increases, experts predict a dramatic decline in house values

After the RBA raised interest rates by 50 basis points, the struggle of homeowners – who are already feeling the effects of inflation – got much worse. A knowledgeable broker discusses the impact of the RBA’s rate rise on homeowners’ mortgage rates and what it means for those wanting to purchase new homes.

Since 2020, buyers have been hammered by a lack of supply, fierce competition, and significant price increases. However, quickly increasing mortgage rates are making it much more difficult to find an affordable house to buy.

Higher mortgage rates have made many purchasers unable to afford houses in specific price categories. The issue is that even modest single-family homes now cost as much as extravagant mansions a few years ago, leaving purchasers with the choice of either waiting for additional inventory to become available or relocating to a region with lower housing costs. Many more people also expect prices to decrease, but that may not happen very soon.

One of the apprehensive homeowners concerned about the growing interest rates is Amrit Bhangal, who lives in Melbourne. Bhangal is one of the homeowners anxious about the rising interest rates. According to Mr Bhangal, who has spent the previous 16 years of his life living in Australia, he has never seen an increase in interest rates and inflation on such a scale before.

Although Amrit Bhangal worries about the rising prices and interest rates, some people could take some comfort in the news.

Maninder Kaur, who works as a mortgage broker and maintains an office in Melbourne, has more than ten years of experience in loan finance. She asserts that in addition to the increase in interest rates, housing prices have also reduced significantly, bringing some relief to those contemplating purchasing a new house.

Ms Kaur also highlighted the impact that increasing interest rates have had on mortgage rates and the factors that potential real estate buyers need to consider before purchasing in light of the recent increase in interest rates. The issue is turning to a major concern for the homeowners in the present time.

Himanshu Yadav

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