Is it a good time to buy a house as prices fall?
As interest rates rise, Sydney house prices are dropping and experts say it is a "bellwether" for what is about to happen across the rest of the country.
Real estate agent Mario Carbone, who works for Ray White in Sydney's inner west, has already noticed a substantial drop in buyer activity.
"It's dropped by about 47 per cent, from foot traffic to the open homes, online inquiries, even the phone calls, we get day to day," he said.
On Tuesday, the Reserve Bank of Australia increased the cash rate by 50 basis points or half a percentage point, to 0.85 per cent.
AMP chief economist Shane Oliver said predicted the cash rate to rise to 1.5 to 2 per cent by year end, and the rate rise will crush confidence and accentuate the weakness in the housing market.
"We continue to see average home prices falling 10 to 15 per cent over the next 18 months, but this may now occur earlier and faster than previously expected," Dr Oliver said.
By lifting its cash rate from 0.35 per cent to 0.85 per cent, the Reserve Bank has just added about another $120 per month in payments for a $500,000 mortgage.
If financial markets are to be believed, by the end of this year it will have added a total of $800 per month — and, by the end of next year, a total approaching $1,000 per month.
In such difficult times, I believe it would be better to shop around and get into lower-priced loan.
Mooers, would you consider buying a house now?
Real estate agent Mario Carbone, who works for Ray White in Sydney's inner west, has already noticed a substantial drop in buyer activity.
"It's dropped by about 47 per cent, from foot traffic to the open homes, online inquiries, even the phone calls, we get day to day," he said.
On Tuesday, the Reserve Bank of Australia increased the cash rate by 50 basis points or half a percentage point, to 0.85 per cent.
AMP chief economist Shane Oliver said predicted the cash rate to rise to 1.5 to 2 per cent by year end, and the rate rise will crush confidence and accentuate the weakness in the housing market.
"We continue to see average home prices falling 10 to 15 per cent over the next 18 months, but this may now occur earlier and faster than previously expected," Dr Oliver said.
By lifting its cash rate from 0.35 per cent to 0.85 per cent, the Reserve Bank has just added about another $120 per month in payments for a $500,000 mortgage.
If financial markets are to be believed, by the end of this year it will have added a total of $800 per month — and, by the end of next year, a total approaching $1,000 per month.
In such difficult times, I believe it would be better to shop around and get into lower-priced loan.
Mooers, would you consider buying a house now?
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MooMamaLlama : given all the movement in our government, interest up, homes back on the market, I'm very glad I invested in REA group a while back. Definitely cant afford a decent house right now in Sydney....so I'll make a little off all the new investments in advertising homes down here
Amani koalaOP MooMamaLlama: REA is doing well today, good luck with your investment!
MooMamaLlama : thanks
Thanks also for a great info bite. In often US or Asian driven markets, as right now, I often feel lonely on some platforms!! I signed up with moomoo specifically to invest in Aussie stocks that were just not even listed elsewhere. I appreciate seeing/hearing an Aussie voice!!
Amani koalaOP MooMamaLlama: thank you for the kind words! I do feel like moomoo is a great platform to share personal investing experiences for people from all over the world, that's why i keep posting here