Rising interest rates may force more homeowners to sell
In a survey of 1,061 respondents it was found that close to one in every 10 home buyers believe that the recent Reserve Bank interest hike may force them to sell.
A little more than half of those surveyed or 536 were paying for mortgages according to the survey commissioned by Australian mortgage brokers, Mortgage Choice. The survey found that an estimated nine per cent of mortgage holders said they could not afford increases to loan repayment rates. The forecast 25-basis-point increases next year would be enough reason for around 18 per cent of home buyers to think about selling said the survey.
Despite increases in interest rates, survey respondents considered the issue second to cost-of-living expenses hikes such as clothing and utility bills . Mortgage Choice CEO, Michael Russell, told The Australian that the survey findings were borne out by a subsequent doubling of calls to the group, most from anxious home buyers wanting to refinance mortgages.
The Reserve Bank announcement to increase interest rates on November 2 surprised many industry analysts that predicted that rate change would take place following an only 2.4 per cent inflation rate in the last quarter.The move was part of government efforts to contain inflation as the economy strengthens because of robust demand for iron ore and minerals from China and India.
The rise in interest rates led to top banks increasing their marginal rates by more than 25 basis points.