Changing interest rates have a very real and direct effect on mortgage rates and therefore the overall performance of the property market.
Historically a 7% interest rate has been considered the tipping point for buyer interest/disinterest. Any percentage point below 7% typically sparked activity in the real estate sector as both buyers and sellers gained confidence in the market and the affordability of housing from mortgage point of view. Any percentage points above the 7% mark will start to see a slowing in the market as buyers felt the pinch on monthly repayments and return on investment.
Over the last two years variable rates have steadily decreased from a 7.00% starting point to around 5.00% today. Only recently have we seen the impact of these low rates.
After a long period of lower rates, it appears the new tipping point for the housing industry is now pegged at the 5% mark. Significant activity in property sales in NSW property sales can be tracked against this new marker.
When considering the impact of interest rate changes and how you can best use them in your favour, a Buyers Agent will be able to supply all the relevant data.