Rate rise ‘won’t deter investors’

A leading property figure says the Reserve Bank’s decision to lift the cash rate by 25 basis points spells tough times for those battling mortgage stress but could be a boon for property investors.
PRDnationwide managing director Jim Midgley said the interest rate rise would boost investors’ confidence who had retreated during the downturn.
“Property investors who have been waiting for the first home buyer activity to drop are now looking to pounce since interest rates started to go up,” he said.
Mr Midgley said investor activity was up across the board according to feedback from 130 PRDnationwide offices across the country. The relatively small interest rate rise would have minimal impact on house prices.
“The real estate market has come through the downturn quite well because of an under supply of real estate in Australia,” he said.
“This rise will most likely affect those who have already bought and did not factor in increases and are suffering mortgage stress,” he said.
“I expect it will be the last rise for 2009 – we can expect further increases in January.”
PRDnationwide said Queensland house and unit sales for June totalled $3.2 billion, which was bettered by the $6.3 billion achieved in NSW.
Sales volumes held relatively steady compared to 12 months ago, when Queensland house and sales for June 2007 totalled $3.5 billion, and $5.2 billion in NSW.