The Reserve Bank has lifted the official cash rate 25 basis points for the third consecutive month, taking the rate to 3.75 per cent.
While a December rate rise was always likely, the bulk of agents are unhappy with the Reserve Bank’s decision.
According to Real Estate Business’ latest straw poll, 85.8 per cent of agents believe the latest interest rate rise will have a negative impact on the market.
Of the 605 respondents, 45.5 per cent said that a rate rise may affect the market, 40.3 per cent said it would shatter public confidence, and only 14.2 per cent said fundamentals were too strong for the latest hike to have a negative impact.
Herron Todd White property analyst Rick Carr said that while interest rate rises indicate the economy is recovering, some local markets are still quiet and the Reserve Bank should tread carefully.
“The timing is probably a bit early for us," he said.
Laing & Simmons general manager Leanne Pilkington agreed with Mr Carr and said any interest rate movements encourage sellers to stay put.
“Many people, particularly those with a lower income, will choose to hold onto their home during these volatile periods, because selling their home means buying something new and that generally entails getting into more debt,” Ms Pilkington told Real Estate Business.
But it seems that not everyone is feeling the pinch. Ray White Chairman Brian White is confident that the market won’t be affected, as sales figures throughout Australia during October were well above last year– despite the RBA lifting rates.
Mr White said many home owners were factoring future interest rate rises into their budgets. He said that a move by the RBA to raise interest rates will ensure property prices won’t outstrip inflation and will help create “a balanced property market”.
“We have lived for decades with rates far higher than they are at the moment,” Mr White said.