An expert from RMIT University is available to comment on how the RBA’s latest rate hike will impact homeowners and the property market.
Dr Peng Yew Wong (0431 003 405 or academic )
Topics: RBA, interest rates, home ownership, housing market
“The RBA is on a definite pathway embarking on a series of “contractionary monetary policies” by increasing official cash rates.
“Putting the inflation pressure aside, the rise in the RBA cash rate will be translated into an increase in home mortgage interest rates. Undoubtedly, this will directly impact home borrowers as they will need to start paying a higher mortgage repayment as a result.
“Can they afford the higher mortgage payments in the midst of an unprecedented inflation? Borrowing power of homebuyers is simultaneously reduced, so perhaps it is prudent to assume some might not be able to? House prices in Sydney and Melbourne are already on the down trend as a result.
“We are quite certain that the negative impact on homebuyers’ borrowing power will negatively impact the housing market buying activities. This reduced housing market buying activities should translate into reduced house prices.”
Dr. Peng Yew Wong is a senior lecturer in the School of Property, Construction and Project Management at RMIT University. His key research efforts centre on exploring the key determinants in the Australian and global residential and commercial property markets.
