Real Estate Institute (REI) of New South Wales president Rowen Kelly says the Reserve Bank of Australia's (RBA) decision to raise interest rates by one quarter of a% today should benefit the NSW property market.
Kelly said the RBA board’s decision may make property investment less attractive for speculative property investors and therefore take some of the “heat” out of the property market.
“This is good news for home owners and mum and dad investors,” Kelly says.
Kelly said that in recent times low interest rates and a volatile stock market had contributed to more short-term investors putting their money into the property market.
“In the last few years the demand for property has been very strong, but I think we’ve seen most of the pent-up demand for investment property satisfied, particularly among those who are looking to make a quick profit in real estate,” Kelly says.
“This increase in interest rates will hopefully contribute to a more “normal” property market in term of demand and growth in prices, “ he said.
“Interest rates are still historically very low and property is still a very good investment,”
“These rate rises won’t deter home owners and long-term investors from entering the market,” he says.
Kelly reminded anyone taking out a new home to budget for rate changes over the life of their loan.
