Don't panic about interest rates

Okay so interest rates are tipped to rise today.  That means tomorrow the news will probably carry headlines about the impact on the Aussie family budget and those stories will be followed by others talking about the flow-on effect on the real estate market.

But what does an interest rate really mean for those looking to buy or sell a property?

Yes it can mean buyers are more price sensitive but it doesn’t mean potential buyers withdraw from the market completely.  Interest rates shifts should not be evaluated in real estate isolation.

For example buyers may baulk at the impact of an interest rate rise but remain motivated to invest given continued evidence that Australia, and in particular Sydney, is suffering from a chronic and worsening housing shortage. 

At the same time competition amongst mortgage lenders has returned to pre-GFC levels so opportunities do exist for buyers to secure favourable finance terms for their home or investment property. Take an interest in the commentary around the rate rise and take it into consideration when setting your budget to buy or your price to sell.

But remember that the media furore around a rate rise does not necessarily have to reflect your own ambitions to achieve a successful property outcome.