How the RBA rate rise affects Moreton Bay home buyers

Following today’s RBA interest rate rise, Redcliffe real estate agent Jo Szulc has advice for house buyers and sellers in Moreton Bay.

At its September meeting, The Reserve Bank of Australia (RBA) lifted interest rates by 25 basis points from 4.35 per cent to 4.6 per cent.

It is the fourth interest rate rise this year and takes the RBA’s cash rate to the highest level since the start of November 2011.

As a rough guide, an increase of 50 basis points can reduce maximum loan sizes by up to five per cent and a one per cent increase can reduce borrowing capacity by around 10 per cent.

Jo Szulc, from Ray White Scarborough, said rate rises “naturally create hesitation” but history shows that can be a “missed opportunity”.

“Over 23 years on the peninsula, I’ve seen when buyers step back, competition thins out - giving smart buyers room to negotiate and not get caught in bidding wars,” Jo said.

“So get your finance pre-approved, focus on property fundamentals like location and liveability and take advantage of the calmer buying conditions while they last.

“Look at your budget honestly, stress-test it a bit higher and don’t try to time the absolute bottom of the market.

“If you find a great spot - whether it’s Redcliffe, Margate or Scarborough - and you can comfortably afford the repayments, buy it and live your life.”

Jo advises home buyers to “be prepared, know your numbers, don’t get caught up in FOMO (Fear Of Missing Out) or panic”.

“Have finance pre-approved so you can move quickly when the right place pops up,” she says.

“Because borrowing capacities tighten a little with a rate rise, there can be slightly less frantic competition in certain brackets.

“This gives level-headed buyers a chance to breathe, do their due diligence and secure a great property without a massive bidding war.”

Rate rises are uncomfortable for first home buyers, but Jo says: “Look at the whole picture - not just the rate.

“Get a rock-solid mortgage broker who can show you what your actual weekly budget looks like with the increase.

“Buying your first home is rarely about buying your forever home; it’s about getting your foot in the door.”

A report from Domain suggests sizeable differences between property price listings and figures from consumer online search in Moreton Bay.

Moreton Bay’s examples include the gap for properties in Bribie and Beachmere was $239,000 but has reduced to $132,000. The gap in Caboolture is around $126,000.

Following the interest rate rise, Jo’s advice to sellers is: “Don’t panic but be realistic.”

“A changing rate environment means buyers are a bit more cautious and doing their homework, so pricing your property right from day one is everything,” she said.

“Over pricing and testing the market rarely works when rates are shifting.

“If you partner with an experienced agent who knows local buyers and you present your home beautifully, genuine buyers are still out there."

Every interest rate “shift” may feel like an “earthquake” to newer buyers and sellers, but Jo says experienced agents know “markets breath in and out”.

“I’ve seen rates much higher than this and people still bought, sold and raised families in Moreton Bay,” she said.

“My advice to anyone feeling stressed - whether you’re a homeowner or trying to buy - is remember this is just one chapter in a long book.

“Focus on what you can control: your household budget, your long-term goals and lifestyle.

“Property on the Redcliffe Peninsula has always been a safe harbor and that hasn’t changed just because the RBA made an announcement.”