Opinions on effect of interest rises?

With the 4 big banks upping their interest rates by 0.20% and some smaller lenders following suit. I'm interested to see your thoughts on buyer competition?

Realestate.com.au released an article about the trends and believe that it will only increase buyer activity/competition. I have to agree personally, I think it's an eye opener to those that are taking there time to purchase that interest rates are not going to stay low forever. I believe, being an agent that we will see a busy christmas and early 2016 with many buyers trying o get in the market now and lock in interest rates. Can also see many people selling and upgrading in that time too, making use of the equity and current rates.

Interested to hear your thought? (i'm located on the Gold Coast).

 

I'm an aspiring first home buyer and a 0.2% interest rate change won't really affect me. It's about $8 a week difference in interest. Of course Sydney is much more expensive but if a little rate change affects your decision then you probably shouldn't be investing in property.

 

As a Melbourne seller in the first week of December I am hoping the rate increase coupled with the auction break after summer may make some buyers edgy and willing to pay a little extra to lock something away.
I'm more interested though to see what the RBA will do and the effect that will have. Part of me wants a rate drop as buyers may think they can spend more but part of me doesn't, thinking will another drop only spook the buyers more as to what is happening with the economy.
Most people do not research past what the paper dishes up to them and if it's doom and gloom (as it will be with another drop) then I think a few people will put the cue in the rack over summer and just wait it out.

 

The herd buying houses has no clue about the RBA, or cash rates or what will happen. All they know is rates went up and now they automatically think rates will get higher and prices will drop.. It's what's happened in Sydney and Melbourne.. Unsure on Brissy ATM. My comments are coming from the multiple experienced agents who work in real estate in both Sydney and Melb

 

I doubt there will be any rate movement on Tuesday. The RBA seems content with things. Sydney has cooled down. Melbourne not far off. Brisbane is a bit of a mixed bag. But nothing too crazy in general. Plenty of negative press which suits them just fine in helping stabilize the crazy markets. I say rates to hold.

 

IMO they'd be silly to cut rates ATM. It will be adding fuel to the fire

 

Realestate.com.au is an advertising vehicle.
You are a young impressionable kid who wants to make money selling real estate.
You both believe rising interest rates will increase buyer activity.

Here's a question for you.

Has Realestate.com.au ever released an article stating buyer activity will decrease?
Has any real esate agent ever disagreed with this?

Have a good think about it..

 

The banks rate increase and gloomy news puts fear into people, thereby less buyers looking leading to less competition.

 

It will slow the market.

 

My selling agent in Toowoomba told me buyers will want to get in before rates rise again, and it's also the perfect selling time from now till feb in that area.
I don't know the Toowoomba market but told him to hurry up and get it on the market ASAP. The higher they go, the worse the sale will be, me thinks.

 

But will rates actually rise in the near future? I don't actually think so. Btw, your selling agent also has a vested interest. No listings = no income.... so don't just take his word for it on whether it is a good time to sell.

 

Yes there is a vested interest. To be fare I've heard this a few times over the years with agents regarding the better periods of selling. It's the same with rents. I'm not sure if interest rates will rise again, the sale is taking place in early Jan so not sure what smart idea the banks will do. I just wish this property negativity in the news would stop till I sell lol.

 

I am familiar with this market, yes it is saturated with new unit stock coming in, but if your have house and land I wouldn't be selling.

In the past Toowoomba has shadowed Brisbane's performance and with the lower end in Brisbane moving fairly fast I can't see Toowoomba stagnating behind this growth . Houses don't sit long on the market there both in rentals and selling

 

Banks have lifted thier rates recently because the RBA will drop theirs.
Its a challenge to try stimulate the economy without adding more fuel to the property market.
The RBA has constantly mentioned in its speils that they are "working with regulators" to try to contain the property market.
I still think we will see the cash rate at 1.5% before too long.
The Aussie dollar isn't weak enough yet also.

 

Lower end moving fast? Whereabouts?

 

No, the two latest bank interest rate increases are due to regulatory requirements. As a result of the financial system enquiry, new regulations have been put into place and as a result banks are required to hold more capital for all the funds they lend out. This has resulted in the higher interest rates in the past ~ 2 weeks. It has nothing to do with the rates from the RBA.

The previous 27bp increases back around July were because banks were directed to not increase their lending to investors by more than 10%, so to try to slow down lending to investors, the 27bp increases were implemented.

There could well be a case of banks having all the power, and therefore raising interest rates because they have the scope to do so, and doing what is best for the shareholders, absolutely. But investors can still turn to the smaller lenders.

But I felt I had to point out the inaccuracy of your post because one is not causing the other.

 

It's not an inaccuracy, its my opinion that it is tied together.

I don't buy the media/bank/APRA blah blah blah about increasing capital reserves being enforced etc etc as the reason why banks have lifted rates in the last 2 weeks FOR EVERY HOME LOAN.

So... thanks for the "reported reasons" why banks lifted rates independant of the RBA.....but I don't think it's the whole reason why.

It's never the whole picture we get reported through the media

 

The main reasons for selling is to put the funds into our own ppor in a 2 years. I honestly can't see that much is going to occur in Toowoomba market, I'd rather take the profit now, than risk selling later and the market perhaps turning. While the interest rates are low it's perfect timing, but if the banks raise again it may stagnate the lower end market houses. Also vacancy rates just hit about 5% with all the new units been built, so I'll have to take a hit of about 30-40 bucks a week rent if my tenant moves out.

 

Not all Real Estate agents are the same.
Not all of us are so desperate for listings we will lie our way into a forced sale.
We have a bad wrap, and there are bad agents out there. But not all of us are willing to lie there way to the top.

I actually believe the cash rate will drop in the near future too. They have to steady the property market. Some banks are changing the policies on investor loans and giving out loans less often In order to slow the market.

Our office has been going crazy with buyers at the moment. We had over 80 people through open homes in 1 weekend for 1 agent.