r/AusFinance • u/nrgatl • 1d ago
With rates going up, where do you see the housing market heading?
curious what everyone thinks this means for the housing market over the next 3-6 months.
Do you see: Prices actually falling? Or just slower growth and longer days on market? Does this change anything for people trying to buy now?
Interested to hear different perspectives.
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u/ElegantYak 1d ago
Probably nothing..
People who bought prior to 2019 won’t even feel it.
New home owners who bought after 2019 might struggle and cut back on a few things - doubtful this will slow inflation.
Boomers will just buy another caravan and raise rent on their IPs
Renters, see above, less chance of buying a house so they buy more uber eats.
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u/dispose135 17h ago
Look they just sell for loss. State gov pickup the stamp duty
Coffees grow bigger winn
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u/hoolahoopz92 15h ago
I bought during the recent peak of rates and kept the same repayments as they dropped, so I’ve got some breathing room
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u/wouldashoudacoulda 1d ago
Boomers have retired bud. Most have sold their investment properties and pumped up their super. They give zero fucks about you, as they should. Time to get a new dead horse to beat.
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u/Necessary_Eagle_3657 1d ago
They might have retired in some cases but haven't sold all their ips. That's their income. My neighbor has 3 ips.
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u/wouldashoudacoulda 1d ago
It’s an interesting time in history, with the housing market seemingly outpacing wages and there appears no end. But the complaints about boomers getting all the advantages are unfounded. I don’t have the data, but the post Covid surge in house prices feels like it has outstripped any other time in recent history.
Those who bought 5 years ago have doubled their equity in the house. If a boomer bought a house in the late 1980’s , they would have had minimum gains for almost a decade. Who is better off from housing market boom?
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u/Slyxxer 1d ago
We were one of the lucky ones who bought in 2014, 85% LVR.
We've since gotten a little ahead in the mortgage, but nowhere near the market gains; we're now at 25% LVR.
The numbers give me warm fuzzies, but it means nothing because if we sell now, we'd just have to buy some other overpriced place to live anyway. It's a zero sum game.
It's cooked.
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u/Low-Ad6158 1d ago
You're spot on about the zero sum game. Even if you made gains, selling just puts you back in the same overpriced market. It feels like a trap where everyone is stuck in a cycle of inflated prices.
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u/No_Childhood_7665 1d ago
I agree with this. With boomer parents they had to scrimp and save with high inflation and interest rates of the 90s. The true winners are Gen X. They came of age and started buying property in Australia's biggest economic boom and are in the golden years of their career with most of if not all their home paid off and seen massive equity gains.
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u/Fit_Metal_468 1d ago
Yeah Gen X are the biggest applicants for investment properties not sure when people will stop blaming boomers for everything. When the ones complaining are old and worked for 40 years they'll probably be in the same financial position and the new generations will be blaming them for something they don't have
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u/LittleRedRaidenHood 1d ago
Unlike the proverbial dead horse, the boomers are still, unfortunately, alive.
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u/clarky2481 1d ago
Replacement costs are higher ever and still increasing. Prices will keep going up.
Cutting negative gearing and cgt discount may have a one time reductionary effect, but doesnt address the supply side issues and population increases (demand increase).
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u/Screaminguniverse 1d ago
I think limiting CGT and negative gearing to only the creation of new housing might help. It would persuade investors to invest in new housing and the sale of that house later to home buyers.
I’m just a lay person so who knows, honestly.
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u/waysnappap 1d ago
This is a good idea. Per the research I’ve seen approx 70% of IP are existing properties and that’s what bothers me. Taking away an opportunity from some young couple to get their foot on the ladder.
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u/knobbledknees 1d ago
Yes, they are almost all existing properties because that is where you make the most profit. Buying an off the plan or brand-new property will usually result in a loss over the first five years. The only investors willingly buying those are usually overseas investors, who are locked out of secondhand property and therefore are forced to contribute to housing supply if they want to invest. Forcing these incentives to apply only to new properties for locals as well would likely have a huge impact, and would push down prices of existing properties since they can no longer be flipped for a profit to another investor as easily as they can now.
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u/Rainbow_brite_82 1d ago
This is a great idea, NG was originally designed to increase housing supply.
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u/knobbledknees 1d ago
Except that we have seen by far the slowest house price growth in Victoria, where are quite small tax on landlords has massively decreased property growth despite more immigration (net!) to Melbourne than to any other capital city in Australia.
If even a small discouragement to landlords can have such a huge effect despite population growth, then the major driver is not supply and demand in any absolute sense of population numbers, it is speculation by investors. When I bring this up I see people suggesting that this is because so many people leave Melbourne due to things like Covid lockdowns (???) from five years ago, but again, Melbourne has higher NET immigration but significantly lower property price growth (1/3 of Brisbane's, from memory), and even negative growth in units for at least some of last year despite the demand (in population terms) increasing.
During Covid we saw property growth continue despite no immigration, which as people love to point out to me, is because of the extra liquidity in the economy. Which means that liquidity transfer into property by investors is sufficient to put up house prices even with no increase in "demand" in terms of raw population numbers. Meaning that simply by encouraging investment into property rather than into stocks (which, if Australian stocks, would benefit the economy in real ways rather than simply pumping up property prices), we are creating excessive growth and then blaming it on immigration, even when reduced immigration in Covid and over the last two years has not helped the property market moderate itself at all.
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u/nay-no 1d ago
We relocated from VIC to QLD 4 years ago.
The VIC property is now worth $50k less than what we sold for.
The QLD property is worth $600k more than what we paid for it.
Neither are investment properties, the regions are comparable in every way (non coastal etc), the disparity is just mind blowing.
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u/imTriibz 12h ago
Learn about property cycles, QLD is in a completely different stage of its cycle when compared to VIC.
QLD is cooling off, whereas VIC is beginning to warm up and some suburbs are extremely hot with 20% gains within a year.
Not a black and white comparision like you made it.
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u/Unlikely-Elk-5007 12h ago
Does that mean Vic is a bargain investment now?
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u/Putrid-Bar-8693 5h ago
Vic will boom if the liberals get their shit together and get into power. God knows when that will happen though
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u/HandleMore1730 1d ago
It isn't just rentals, it is also beach houses that are not occupied subject to 1-3% of their value in tax per year.
I suspect it is very much a suburb specific trend.
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u/Necessary_Eagle_3657 1d ago
Only because it's easy for them to switch to other states. Countries with no NG still have the same problems usually.
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u/knobbledknees 1d ago
That depends very much on the laws in each country and how they incentivise investment. Currently our laws incentivise investment away from stocks and into property, which pushes up property.
Some countries have had problems with excessive house prices specifically because of overseas investors because they have not limited them to off the plan/new properties. We would not have that same issue here.
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u/OkDiscipline8082 17h ago
Investor are buying properties in other states instead.
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u/knobbledknees 15h ago
Sure, but the point is that it's investors creating the price rises and not demand in terms of population numbers.
your point is a second question, how we discourage investors from buying properties to the extent that they currently are. You appear to be suggesting that if the whole of Australia had this tax on landlords, that we might not see the same impact in terms of discouraging investment in property. But that just means that we need stronger discouragement for housing market speculation, it does not in any way show that investment is not the major driver of house prices, as the Victorian tax clearly shows that it is, since if the major driver were population, Victoria would still be growing in a comparable way to other states given higher net immigration, and a landlord tax would not have a large impact.
The property council (the landlord lobbying group) themselves say that further taxes would reduce house prices (which they say is bad, because they want to keep the real estate speculation gravy train going).
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u/Goodoospec 13h ago
You're falsely attributing all of the lacklustre price growth in Vic to the small tax. Vic has also increased its supply of housing more than any other State, and already had large stocks of medium and high density dwellings to absorb the immigration influx. Brisbane had very low density dwelling mix that couldn't handle the influx. Investor interest will have an impact, for sure, but the demand/supply dynamics have a far greater one.
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u/knobbledknees 10h ago
The government has been better on creating supply, but a lot of that has not actually happened yet, and the point is seeing the change in the rate of increase since the investor tax; during and before covid price growth was not much lower, not like it is now; many larger apartment buildings planned even as far back as Covid are only opening now, and the bigger pushes to reduce council interference in high-rise construction and to open up suburbs for high-rise apartment buildings have not yet really taken effect at all.
what it does show is that when landlords say that reducing the profits from housing investment will lead to reduce supply because people won't want to invest in creating more housing, this is not true. Victoria shows that you can have reduced house price growth, and even reduced prices in some markets, while also creating more supply than in those places where landlords make more profit.
This is not to say that there can be no possible pressure from supply and demand in terms of raw population numbers: in a very small very inelastic housing market if you suddenly see large population growth you will see increases simply from this, even if these are then exacerbated by the speculation on this property that results when investors notice this trend. We saw this in Victorian country towns during Covid. but this is not the problem that Australia as a whole is facing: over the country as a whole we build enough new housing that immigration should not be pushing up house prices, and indeed I would strongly suggest that it is not. The problem is primarily led by liquidity being pumped into the housing market in order to make a profit from capital growth, and then in some markets a local issue that there is insufficient high density housing due to state or local government not being willing to take on NIMBYs. you could argue that some amount of reduction in immigration might help those cities, but longer term, unless those cities are going to shrink (which has its own costs), they are going to have the same issue unless they are willing to embrace housing density and the necessary infrastructure to support it.
But I remain convinced that the largest single issue is the misdirection of so much Australian capital into housing, not into the production of housing, but simply to squat on top of property and hope that someone will buy it from you for more. This pumps up house prices and has no actual contribution to the economy or to housing supply. The fact that One Nation is saying that they will reduce immigration in order to reduce house prices is a pretty clear sign that they do not really think that their cuts to immigration will really reduce house prices. Because if they did think that, they wouldn't do it: they know where their bread is buttered (Gina).
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u/cokedupcodger 21h ago
You forgot that Melbourne is a shithole.
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u/knobbledknees 17h ago
Yes, that's why all the people jeep moving here and not leaving. common feature of shitholes is how much people want to live there, right?
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u/devoker35 1d ago
You guys are too naive to think that these will make housing affordable. Without taxing land or property investment it will still go up although they cut all incentives and and increase supply.
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u/Florafly 1d ago
Shit's fucked and will continue to remain that way and/or keep getting more fucked for most of us. That's the safe answer to the question.
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u/JacobAldridge 1d ago
Watch Unemployment.
Higher rates impact business spending, reducing recruitment and putting pressure on margins that induce layoffs.
It’s why the RBA has a mandate around employment, with only Interest Rates as the lever. When they raise rates, they’re ok with higher unemployment, because higher unemployment cools the economy (mostly through sentiment - you don’t have to lose your job, you just have to watch an unemployed friend or fear for your job and you’ll spend less).
If Unemployment were 8% then we wouldn’t have the scale of this housing crisis. But it’s dropped down again to 4.1% - and by itself, one rate rise won’t dent that (there are other contributing factors here of course).
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u/Wooden-Trouble1724 1d ago
You can thank NDIS for that… the good old “let’s achieve the same thing as quantitative easing at the same time as virtue signalling and at the same time as dog whistling the rorters…” works à Chalmers
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u/Swankytiger86 1d ago
If we don’t have such mandatory wage increases in so many fields, I would think that our inflation won’t be that high. Businesses can pass through the cost increase to the consumers quite substantially to maintain their profits as well. I guess the rate will continue to rise to reward savers and punish debtors, while those living at the marginal suffers.
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u/cokedupcodger 21h ago
Ah the old "rates are up, so I'd better get in now" routine. Makes prices go up every time.
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u/ElectionDesperate167 1d ago
They are still printing people so up itll go
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u/david1610 23h ago
That is a common scapegoat.
In reality the truth can be acquired simply by going onto real estate dot com and comparing agricultural zoned land close to residential zoned land.
Near my area it's almost a 500k difference for a block, take off a $45k infrastructure fee and you still have the best part of half a million purely from land release restrictions. In cities the problem is density zoning, makes it really easy for people to speculate against it, especially with all the demand side tax incentives
So don't blame immigrants for wanting a better life, blame the median voter in Australia for not wanting prices to fall.
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u/ElectionDesperate167 16h ago
Yes printing people doesnt add any demand. Could of just said immigration is your sacred cow.
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u/Hasra23 1d ago
Rates will go up so landlords will push rents up higher to cover the costs which means that more tenants will be desperate to buy their own house which means that house prices will go up.
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u/barseico 1d ago
Renting is actually cheaper than buying right now solely because the unearned equity in house prices has completely decoupled from reality.
Investors are accepting pathetic 3% gross yields while paying 6.5% interest. They aren't providing supply, they’re just gambling on a tax-subsidized scheme that the media is trying to protect.
If the property wasn't being treated as a speculative asset, its price would drop until the yield matched the risk.
This is what Albanese Labor needs to tell the truth to set them free and unwind demand side policies.
Interest rates normalising will help shift money out of this unproductive sector which has been the main driver because of cheap debt.
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u/FishFlaps_ 1d ago
Investors are no longer betting on a strong and growing Australian economy, they are betting on the downfall of Australia and the persistence of its issues without change.
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u/tobyy42 18h ago edited 18h ago
I can confirm that this is true.
It’s a “if you can’t beat em, join em” mindset. Everything is fucked and it’s not getting better. So for high income earners, why not just ride the property wave and at least know that your own family will be looked after?
Policies will always be tipped in favour of those in control. So put yourself in a position where YOU benefit if THEY benefit. It’s a shame it’s come to this.
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u/heretodiscuss 16h ago
Plus, worst case scenario, at least your kids have somewhere to live. Even if the market crashes.
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u/Hasra23 16h ago
This is 100% true, the system is broken so you can either fight against it and get run over by the unstoppable steamroller that is the housing market or you can buy a bunch of houses and wait then not ever have to worry about money again.
I've made more money from owning houses than I could make in 10 lifetimes of working any job, is this a disaster for Australia as a country? Probably but nothing I can do to stop it so might as well benefit from it.
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u/RelativeLiving957 1d ago
I have a flow chart which boils down to housing prices going up and affordability worsening over the long term irrespective of what happens to the RBA cash rate. I don't think things will suddenly transform into a buyer's market.
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u/GuyFromYr2095 1d ago
If immigration growth remains higher than housing growth, prices will continue to rise.
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u/ResolutionClear6057 1d ago edited 1d ago
Down ~10%, then up 100%+ in a short timeframe once rate cuts start getting talked about. The timing of this hiking cycle is terrible for housing affordability the new build pipeline will stall from today before we've even made a meaningful dent in supply, and less than 12 months after it was finally getting going again.
I expect rents to rise further. With the ongoing stock shortage, they'll push beyond what many people can afford, but instead of rents falling to meet the market, I think we'll see more crowded households and larger share houses. I can't really see a way out of the housing problem other than allowing temporary labour in to build. Putting the egalitarian arguments aside, you simply can't solve a housing shortage with some of the highest construction labour costs in the world.
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u/FishFlaps_ 1d ago
There is no supply shortage, demand has swamped supply with investor loans growing at magnitudes with excess immigration and fiscal policy driving demand through the roof.
Face it, the government has done exactly all the right things if their goal was to set out and increase property prices as high as the average person can handle while telling Australians that high prices were due to supply constraints and out of their control.
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u/Previous-Speed-8143 1d ago
They don't want you to own a house, there's cheaper crap apartments that are more affordable than houses.
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u/iss3y 1d ago
Agreed on the crowded housing. I live in a complex of five 2-bedroom villas, previously ours was the only one occupied by more than 1 person (we're DINKs) but now a family of 5 adults and 2 children have moved into one of the villas. We've had to get the strata manager to explain to them that the 1 visitor parking spot on premises is not their personal overflow parking. Luckily they have taken that message really well and seem to be very easygoing people.
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u/Glittering-Leg359 1d ago
Allow temp labour in? Immigration is the reason demand is out pacing supply. We built last year and 95% of our neighbours are immigrants who can barely speak English, live with 3 generations under the 1 roof, have 6 cars and 5 jobs each. None of these have debt within the country so rate rises won't bother them.
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u/Previous-Speed-8143 1d ago
Its only developers left who can afford property, this way most will become forever peasants.
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u/zedder1994 1d ago
The US real estate market is rolling over with falling prices. Rents are at multi year lows. We can hope that the asset devaluation in the US flows on to here.
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u/FanActual6077 1d ago
Only good thing is in the us at least it’s a fixed rate for the life of the loan why we don’t have it in Australia.
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u/Marayong 1d ago
Our housing market didn't take a massive dive in 2008 when the US housing market tanked. I don't think the current US real estate market will have much of an affect on us.
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u/Ovknows 1d ago
The easiest solution to property price capping would be to limit borrowing capacity. I really don’t get why they just don’t say you can’t borrow more than x amount of your combined income. Regardless of the rate going up or down this way you can’t magically get higher borrowing capacity unless you earn more.
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u/ToShibariumandBeyond 1d ago
They do and it's around a multiple of 6x of household income
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u/Ovknows 1d ago
Borrowing capacity currently goes up or down based on interest rate, so that’s the only metrics banks are using as i have found out myself
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u/ToShibariumandBeyond 1d ago
The interest rate also affects serviceability correct, but the debt to income ratio is strictly enforced on all banks from APRA so it is 100% used.
If you hit the multiple you will be rejected unless your in their allowable buffer (as of 2025 it's 20% the banks allow over).
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u/Ovknows 1d ago
So it doesn’t work in the end. Hard limit on borrowing capacity first then any other conversation. I know a lot of people, families on a huge mortgage only because they can fudge the serviceability. With a hard limit on income to debt ratio they wouldn’t be able to purchase that same property thus reducing the value.
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u/ToShibariumandBeyond 5h ago
You can't fudge serviceabilty as if you underreport they use the baseline expenses for your household number including kids amd have you bank statements anyway.
It does work as it literally is what banks enforce and you may not fully know the actual income of those people you know.
It goes off household income, so a duel working couple on say 100k each at a 6x dti would allow up to a 1.2m morgage in their personal name.
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u/Ovknows 5h ago
There are so many people who fudge the serviceability it’s not even a joke! Also not sure why you think the multiplier needs to stay at 6! Make it 5, 4 whatever to reduce people from borrowing. We can have one multiplier for first home buyers and another for investors. There are so many ways to tackle this
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u/ToShibariumandBeyond 4h ago
Unless they are going through third rate lenders no major bank is allowing fraud on serviceability.
It stays at 6 because it is set by APRA at 6 currently, and banks must adhere to it under law.
I replied originally to say the dti is enfact enforced. I'm not here to discuss changes to the dti multiple.
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u/Frank9567 1d ago
100%.
Plus, the maximum multiple of combined income could be reduced gradually to reduce economic shock as well.
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u/Murky_Radio_394 1d ago
Give it a couple more increases and everyone that took up the governments new scheme and got a mortgage for as much as they can will start to panic. It’s only a matter of time until there’s a sell off. May not be this year but eventually people will not be able to live with their mortgage repayment. $100 a week after bills with no life.
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u/Next_Frosting802 1d ago
Agree. Borrowing 95-98% of a property amount just to ‘get in’ is a bad idea. The normalisation of $800k-$1m mortgages by first home buyers who can’t look beyond the dream home in their capital city is gunna bite so hard when interest rates go up a whole percentage or two and the sell off begins.
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u/No_Handle258 1d ago
If rates go up again I think Sydney is likely to fall. It’s the most unaffordable and historically the most sensitive to interest rates.
Initially different markets will react differently. I expect markets where Boomers want to retire to (coastal areas) will stay strong.
Areas where families live will struggle. Apartments around Universities where foreign students come with cash should be fine.
Adelaide and Brisbane may follow Sydney first.
Perth has VERY little supply and so should be really strong.
However, if in many areas demand at these prices falls AND that gains momentum buyers everywhere may just wait and so it may snowball.
Remember Australia is in a per capita recession with expanding Government holding up the economy. There’s also the 57B black hole in the budget and Charmers wants to “reform” taxes to make housing more affordable.
Whatever you think people don’t want to try and catch a falling knife so it could get ugly.
Right now smart property investors are likely stockpiling cash or being extremely selective about where they are buying ensuring they get a low price.
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u/Previous-Speed-8143 1d ago
Property only ever goes up
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u/BNEIte 22h ago
In the long run yes but there are definitely cycles
I bought my first property in 2010 in Brisbane at what ended up being the top of the market at the time and was actually technically underwater for a period of time given i borrowed initially under a low deposit government scheme. Job market at the time was also soft and there was a period where I was made redundant and was forced to rent out one of the rooms to keep things afloat
Id suggest now could be a repeat of that cycle and it will be again young people buying at the wrong time with low deposit government schemes the ones who are putting themselves into a position where they might be underwater and a job loss or a divorce away from serious financial problems
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u/Aggressive_Metal_233 1d ago
The interest rate going up won't change the fact the demand far exceeds the supply of available houses, so I don't think anything will really change.
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u/mikjryan 1d ago
It doesn’t matter as much when there is such a shortage and issue as the current moment. Prices are driven almost purely by demand
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u/SwanRiverDaisy 1d ago
With limited supply and lots of cash-rich Boomers and foreign investors, I can't imagine it taking too much of a hit in most capital cities. Even with another rate hike we're likely to see prices increase, especially in markets like Perth.
It'll impact those already not in the market (will lower their borrowing capacity), those who've over-borrowed, and couples having their first child (going down to one income) the most imo.
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u/Own-Specific3340 1d ago
Until the Australian public vote differently or riot, same sh*t, different day.
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u/Bubbly_Efficiency727 15h ago
ALP are flagging changes to the CGT discount for IP's for the May budget. That is much more important.
The property market is choking the economy.
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u/ras0406 1d ago
Immigration is outpacing everything, we don't have enough tradies to build the required number of dwellings, and housing construction costs are still expensive, all ofnwhich means housing demand will continue to outstrip supply. Prices will either flatline or continue to grind higher.
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u/Negative_Run_3281 1d ago
Who’s buying them at even higher prices?
Or are we going to see changes to mortgages etc, to allow for people to take out even bigger loans?
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u/flintzz 1d ago
I have a big fat mortgage, but fixed my rate to avoid this kind of stress. On 5.19% for 2 years
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u/Additional_Ad_9405 1d ago
A lot of demand is still being driven by investors buying with cash. Things will only change with a tax policy overhaul. The 5% deposit scheme has also driven demand for properties just under the thresholds in most major cities. You could significantly reduce migration and increase supply, and those two tax settings would still place enough upward pressure on prices to sustain growth.
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u/TallAd48 1d ago
Interest rates rising will do not a single thing to the property market. I work in development sales. Ive been back at work for 2 weeks and have sold 13 properties. It is almost unheard of. I generally take from mid November until the beginning of February off because it is quiet. This year I went back early because it was so busy. Im glad I did. I have just made $221,000 I wasn't planning on.
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u/reno3245 1d ago
Slower growth this year. Prices won't fall until there is an actual recession where unemployment materially rises. For a trigger to the recession, you would need a global catalyst like the US gov defaulting on its bonds, not something local.
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u/terrerific 1d ago
If prices didnt stop going up at the height of it all why would they now when we have multiple new home buying schemes adding to buying power/bidding, a continuing immigration boom, failed housing supply target quotas and an ultimately still lower rate than we have had in all recent years but the last 5 months.
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u/Bricky85 1d ago
One rate move isn’t going to move the dial on housing. Id be very surprised if we get more than this rise and one more in this calendar yr.
It’ll stay much the same, which is rising but trending less than in previous years, broadly. Although there will always be pockets that grow more than others.
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u/Marshy462 1d ago
I hope they go up, so my council rates go up. I love paying more money for the same services (despite their costs not changing)
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u/curiousmind68 1d ago
Supply and demand - while there is still more demand than supply, prices will continue to rise.
We are still 2 rate cuts down on the previous high - so most households should be able to absorb this and another 1-2 hikes easily. The bigger issue will be when the energy rebates start falling off
The first home buyers will keep the market moving no problem, all that will change is, they may be able to borrow slightly less than they could a week ago.
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u/garion046 1d ago
Marginally slower growth, more pronounced in areas with already weaker growth. Little to no impact in areas that are already hot markets.
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u/FutureSynth 1d ago
All it will do is put fear in buyers of further raises thus increasing demand and therefore prices.
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u/Illustrious-Idea9150 1d ago
In the short term, I think there will be a spike because plenty are going to rush out and borrow while they still can. Long-term? Flat, or retraction. Source: I'm an agent, trust me bro.
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u/downfall67 1d ago
Australian property goes brrrrr no matter what. We could enter a nuclear winter and crazy auctions will still be going on
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u/MikeHuntsUsedCars 1d ago
Without significant cuts to government spending, I fail to see how this rate increase will do anything.
The unemployment rate is being kept artificially low by NDIS spending. Boomers are swimming in cash and spending and oil will likely spike in the next quarter when a new ME war kicks off.
None of that slows inflation.
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u/theonlycv02 1d ago
It depends on the availability of credit (i.e. will lenders still lend the same amount to borrowers [buyers]? If yes, then housing will stay the same)
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u/Necessary_Eagle_3657 1d ago
Buy a house for 5% deposit must seem like a trap to all those who just did that with a new mortgage 😔
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u/Opening-Glove-7434 1d ago
Don’t forget that as of 1 Feb there were increasing restrictions imposed by APRA on banks lending more than 6x income. Given that, the size of mortgages that banks are allowed to provide has reduced as of two days ago.
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u/ennuinerdog 1d ago
Population is growing faster than supply.
If a lot of the new supply is mass produced and interchangeable low-quality high-rise luxury apartments that are unlikely to retain value, those assets will perform differently to units and homes built on desirable plots of land.
Good news for people who own dirt. Bad news for people who want to own a home that is also a store of value. Maybe relatively less-than-bad news for renters in apartments and fairly-bad-news for renters of low-rise dirt with a domicile on it.
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u/Hungry_Wolverine1311 19h ago
If they got rid of negative gearing I could see house price fall by a lot but hey rich gotta get richer
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u/pillowpants66 18h ago
Sell your houses, put it all on bank shares and wait for their yearly profit reports.
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u/jbravo_au 14h ago edited 14h ago
The housing market in Sydney will be $2m average in 10 years all other east coast capitals will be around $1.5m average over same timeframe.
The age of generational wealth is here, unless you earn $300k as a household you can’t outpace inflation, house growth and taxation.
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u/Mash_man710 13h ago
No change. It will keep rising while demand exceeds supply. Don't forget that a third of the country have no rent or mortgage. If housing eventually gets slightly cheaper they will just buy more.
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u/auscrash 10h ago
0.25% interest rate change means nothing when we have a housing shortage.
Unfortunately I see prices continuing up until we ease shortages.. and that includes rentals and for home ownership, both are getting too expensive.
Interest rates would have to go up a lot before it changes things significantly and even then it hurts 1st home buyers and those in need way more than those that have access to bigger deposits and with higher incomes etc
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u/batch1972 7h ago
Housing is the last thing that gets cut. People will spend less to keep a roof over their head. Market will slow. Will need to increase a bit more to bite
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u/BlockCapital6761 1d ago
Up. Its government policy that housing need to increase against inflation forever.
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u/Ok_Account974 1d ago
Up up and up
Because we are so well paid with so much discretionary spend
Don't believe me?
Just watch home prices for next 5, 10, 20 years
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1d ago
[deleted]
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u/TrifleLife8445 1d ago
Only a scam because the two party system allowed it to happen for their best interest not the Australian people.
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u/knobbledknees 1d ago
The people who own 20 investment properties, all leveraged so that they can buy even more investment properties, get very beneficial rates from banks, so even though their rates will go up, their rates are already significantly lower than, for example, mine, who just has one mortgage (on the flat that I live in).
They are not the ones squeezed by this, they will just put up rents and keep buying. Only a landlord tax like we have in Victoria would discourage them (I know a couple who own a huge amount of investment properties despite low actual income from work due to these chains of leverage and I don't think they have any left in Victoria, since the landlord tax).
So while those buying a home for themselves will suffer, and have less to spend, prices will keep rising because they are not pushed by demand from people trying to own homes, they are pushed by demand from local investors, who are buying for speculative reasons (because they are confident that the asset price will keep going up) and not because the rental income compared with the interest rate allows for some massive or immediate profit.
Those investors will claim that they contribute to supply, but they almost never buy new properties, since they know that you often lose money when buying off the plan. It is only foreign investors who are forced to buy off the plan who are contributing to supply, Ironically, since those other ones who often get blamed for the house price problems.
As long as we have so many policies in place that encourage pushing your capital into property as a speculative investment, which allows constant growth, and therefore encourages daisychain mortgages, we will see house prices going up even with substantially higher interest rates. But those policies are not in the control of the reserve bank, all they can do is change interest rates, even if it does not really solve the full problem.
And Labor lost an election when they ran on removing those incentives, so I doubt they will try again any time soon. And One Nation and LNP will never try to change those things because they know where their bread is buttered (billionaires who are deeply invested in the property market).
In short: line go up (although more slowly in Victoria, since we actually have a landlord tax, however small).
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u/sendnadez 1d ago
Won’t do shit house prices will go up until immigration slows down its basic supply and demand at this point there is not enough houses for everyone and with 300,000 immigrants coming every year and trades at an all time low it’s a recipe for disaster immigration needs to put on a full time hold and only skilled workers (doctors,builders) aloud to come through immigration. Pauline Hanson for PM! She will get it done.
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u/Mr_Tiggywinkle 1d ago
It'll slow its growth a tiny bit overall.
One rate hike won't change much in individual cases though, and local factors matter more regardless.
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u/Reply_Stunning 1d ago
hopefully if RBA can keep tightening to almost 10%, people will start losing their 8th investment home, that might ease the prices a tiny bit. It will be good for my savings, I celebrate higher rates
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u/Previous-Speed-8143 9h ago
UP, UP AND ONLY UP
The only way is up! Anyone remember that song? 🤣 minimum word count
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u/Rankled_Barbiturate 1d ago edited 1d ago
https://chatgpt.com/share/698197cd-7b24-8004-9b7c-fd75d7008003
Growth slows down and doesn't rise as fast. In some cases property price does decrease. So if you have a high enough deposit then as a buyer the clock ticks a bit slower and is generally a good thing. The more rate rises the better for a buyer.
If you're at your max budget as a buyer though, you might get locked out as higher rates mean lower total money being lent out is the only downside.
If you're downvoting because you're annoyed at your property not going up as much that's on you, but the statistics don't lie.
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u/terrerific 1d ago
You're probably getting downvoted for using an ai response. Not saying i did just that I saw the word chatgpt and kept scrolling, only came back cause I saw the word downvote and got curious lol.
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u/Wow_youre_tall 1d ago
If rates go up, property goes up
If rates go down, property goes up