The future direction of interest rates and the likely impact on the property market is currently unclear. An article in the Daily Telegraph early last week said interest rates will be 2% higher than current levels within 18 months, if the Government’s recent budget projections come into effect, meaning homeowners will be paying upwards of 9% on their mortgage. The article went on to say economists believe the predictions are conservative and that the average variable rate could actually be closer to 10%.

Meanwhile, an AAP article reported the Reserve Bank (RBA) has indicated interest rates will be left on hold at their next monthly meeting in early June, hinting the cash rate may not be lifted for some time.  A separate AAP article included the RBA’s announcement that Australia does not have a housing bubble, but warning banks and lenders to be prudent.

A Sunday Telegraph article said Sydney buyers are spooked by interest rate rises and increasing prices. Our office & the Ray White network in general is seeing early signs that the heat is coming out of the market. A Sydney Morning Herald article said that homes in the topend are taking double the time to sell as cautious buyers await serious price adjustments.