But, says Rhys Dyer, Ooba CEO, now is still a great time for first-time home buyers to be entering the market.
Conditions still favourable for first-time buyers
“It is unfortunate that we are seeing further interest rate increases when the consumer is under such pressure, the growth in the economy is stalling and the growth in credit demand remains at very low levels,” he says. “Whilst the 25 basis point increase announced by the Reserve Bank earlier this month is not that significant on its own, we must be cognizant of the fact that the country is in an upward interest rate environment with potentially further rate increases to come this year. Consumers will be giving greater consideration to taking on more debt in this environment.”
Dyer, however, says potential buyers should not let the increase dampen their enthusiasm, as the current conditions remain favourable for first-time buyers to join the property market ahead of more aggressive property price increases that are expected.
Despite the recent increases, interest rates are still at comparatively low levels, and house prices, whilst growing are still relatively affordable, with house price growth likely to be tracking below wage growth in the short term. Stock shortages in certain areas are still prevalent, and this is assisting in driving prices higher. Despite the increasing interest rate cycle, there are still many good reasons for first time home buyers to get onto the property ladder now, before we see a change in the cycle to more aggressive hose price increases.