Rate pause welcome, but wait to see impact on WA market: REIWA

5 Apr 2023 Posted By:

REIWA CEO Cath has welcomed yesterday’s announcement by the RBA to leave the cash rate unchanged at 3.6 per cent.
“It takes time for changes in interest rates to take effect so the RBA taking a breather to see the full impact of the previous 10 rate rises is positive and something they can afford to do with recent data showing inflation is starting to ease,” she said.
Ms Hart said the decision would be welcomed by home owners and investment property owners who had seen repayments on the average mortgage in WA increase by 44 per cent since April 2022.
“Unlike east coast markets, WA has proven to be resilient in the face of 10 consecutive interest rate rises,” she said.
“Our prices have remained stable, properties are selling quickly and sellers are still relatively confident in bringing their home to market. We do not expect this pause to change this sentiment.
“However, we still expect upward pressure on rent prices as the number of houses for rent remain at near-record lows.
“There are also tenants who signed 12-month leases before the first rate rise in May last year who are likely to see their rent increase for the first time when their lease is up for renewal in the next few months – average mortgage repayments have increased by about 44 per cent over the same period.
“We will continue to watch the WA market to see the impact of the current changes – we also need to take into account the significant number of mortgage holders who are about to move from fixed-term to variable mortgages.
“A period of rate stability, or even rate cuts, will be needed before we see major market changes.”
Source: reiwa.com.au
5 April 2023