But property economics are a funny thing and rising rates can bring potential buyers some advantages.
“While prospective buyers could see a reduction in their borrowing capacity as a result of interest rate increases, rising rates could also trigger a decline in property prices, which may help first-home buyers enter the property market sooner,” reports Domain.
Is that true?
Maybe, but don’t expect the bottom to drop out of the market anytime soon. Rising interest rates will more likely slow growth before we see any reversal.
“Housing affordability is challenged in the face of rising prices to a point that the benefits of lower mortgage rates become diminished,” said Nicola Powell, chief of research and economics at Domain.
“But, with the prospect of rate rises, a slowdown in market conditions and rising supply could ease the pressure a little on first-home buyers.”
What’s the best way to ease pressure on your first home budget?
To avoid mortgage stress aim to spend less than 30 per cent of your household income on your mortgage. And if that means you can’t afford your dream home?
We get it, buying your first home is a big emotional investment. But keeping a clear head and knowing where you’re prepared to compromise will help you avoid a budget nightmare.
Need some help to get on the ladder?
Contact us for a chat or view our current listings for sale.
