How the interest rate rise will effect home sellers
Over April’s five weekends the Real Estate Institute of Victoria (REIV) recorded more than 4,287 auctions. 2,660 properties sold. 1,975 at auction, with 872 passed in. 682 properties were sold before auction & 3 properties were sold after auction. The clearance rate was 76.25%, down on March’s 78.25%.
The market was solid across April with high demand, a high clearance rate and a feeling that home values had plateaued.
First rate rise in 11 years
The sands shifted this week when the Reserve Bank lifted the official cash rate from 0.1% to 0.35%, to try and counter racing inflation.
What’s happening is the Reserve Bank is withdrawing some of the extra monetary support it put in place to get the Australian economy through the pandemic. In fact the economy turned out to be very resilient and this has caused inflation to pick up more quickly than expected.
But interest rate rises put downward pressure on buyer confidence, with existing and new borrowers having to adjust to higher monthly mortgage repayments. Banks had been predicting continued rising values for homes across 2022 but with the likelihood of more interest rate rises that idea is evaporating fast. AMP for example predicts Australian house prices may fall from here by 10 to 15% by 2024.
How much will the rate rise effect home sellers?
Exactly how much the RBA’s move affects home values in Melbourne will be revealed by sales results across the next few months.
But home sellers or upgraders wont be disadvantaged if they make the right moves. With Vendor Marketing helping to navigate your sale you’re certainly in the strongest position to get that all important maximum sale price.
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