REINSW says people need to adjust expectations

Real Estate Institute of New South Wales president Rowen Kelly says people selling their home will need to adjust their price expectations to take into account today's increase in official interest rates.

Kelly says the increased rates will reduce the amount many people could afford to borrow for a home loan, and therefore impact how much they could afford to pay for a property.

“Sellers need to consider that buyers can’t afford to borrow as much as they have in the past,” Mr Kelly said. “They need to be realistic and adjust their expectations to fit a more price sensitive market.”

Despite today’s increase, Kelly says NSW property market conditions are the best they have been for buyers for some time, with more available properties and sellers prepared to negotiate prices.

“The recent slowing of the NSW property market, along with today’s announcement has contributed to a more level playing field for buyers and sellers in the property market,” Kelly says.

“While it is disappointing that the RBA has decided to raise interest rates again, given the market had stabilised without government intervention, I am sure this rise will not deter people from investing in property,” he said.

However, Kelly says the RBA’s decision would further impact housing affordability, making it more difficult for first home buyers to enter the market, and reducing the discretionary spending of existing home owners.

“REINSW calls on the Reserve Bank to consider the evidence from the market before any further increase in interest rates in the New Year,” he says