While the November interest rate rise may slow Australia’s property market rebound, its unlikely to stop prices rising, according to the experts.
Economists say while it will further reduce home buyers’ borrowing capacities, the impact will be offset by more powerful factors driving the home price increases.
PropTrack senior economist Eleanor Creagh says record levels of net overseas migration, limited housing stock and a shortage in supply will continue to push prices up.
“This additional increase in interest rates may slow the current pace of home price growth but is unlikely to deter these gains, with strong population growth, tight rental markets and a housing shortfall fuelling further price rises,” she says.
Earlier this month NAB predicted 5% increases in property prices in 2024.
Although AMP Capital chief economist Shane Oliver says the risk of another rate rise before the end of the year, could subdue demand and slow price growth.
"We’ve seen auction clearance rates slowing down, which suggests that still high interest rates have started to get the upper hand again over the huge supply shortfall we have on the back of booming immigration,” he says.