Buyer advocates are tipping the next fortnight to be the best time in a decade to make a cheeky offer on the back of Tuesday’s interest rate rise announcement.
While many home buyers will be sitting on the fence and feeling despondent about the ninth rate increase since May last year, buyer’s agents plan to make the most of a downturn in consumer confidence.
This week the Reserve Bank of Australia (RBA) announced a 25 basis point increase in interest rates, taking the cash rate to 3.35 per cent.
Laying out its reasoning, the RBA cited higher than expected global and domestic inflation. Furthermore, it forecast the unemployment rate to increase to 3¾ per cent by the end of this year and 4½ per cent by mid-2025.
Real Estate Buyers Agents Association (REBAA) president Cate Bakos said most buyers were expecting the rate increase and had factored it into their purchasing strategy, many with mortgage pre-approvals in place.
“I don’t think this announcement will send shock waves to anyone who has been following the property market for the past year,” said Ms Bakos.
“With no cash rate moves due to January being an RBA meeting block out, there are some buyers who have used the time to get themselves ready with mortgage pre-approvals in place.
“Certain lenders are offering a three-month validity period regardless of rate movements and a lot of consumers who are subjected to borrowing capacity constraints are going down that path.”
Ms Bakos said many buyers were waiting in the wings and anticipated savvy investors would use the negative consumer sentiment to their advantage.
“We continue to maintain that the second half of 2023 will see increased buyer energy as those buyers who are waiting for the market to bottom will see that the cash rate reaches equilibrium and some level of certainty returns in respect of the RBA,” she said.