With another rate rise in November now all but certain, some real estate agents are worried that potential property buyers could be deterred from investing in the market.
However Ray White real estate chairman Brain White believes rising interest rates are positive as they help to restore balance in Australia’s residential real estate market and prevent a price explosion.
“There’s nothing worse than a market getting out of control and the residential market has been remarkably strong over the last four or five months,” Mr White said.
“A booming housing market produces very few long term benefits. Sure it’s great for sales over the short term but then comes the hangover and the pain.
“Lifting interest rates from near record lows now will help reduce the need for any draconian steps later and it will help create a well balanced market.”
According to Mr White, the gradual movement to more traditional interest rate levels will also help ensure house prices keep pace with inflation.
“We’ve lived for decades with interest rates much higher than they are now and I have little doubt we’ll be absorbing the latest interest rate rise and the other expected increases quite comfortably,” he said.