Home buyers in Australia are facing a lot of difficulties. Interest rates in the country have reached very high levels.
Home buyers in Australia are facing a lot of difficulties. (Image: Reuters)
Home buyers in Australia are facing a lot of difficulties. Interest rates in the country have reached very high levels. At the same time, property prices have fallen. Experts believe that Australia’s real estate sector is going through a crisis. According to a CNBC report, the biggest problem facing home buyers in the country is rising interest rates.
Interest rates rising sharply in Australia
According to the report, a woman living in Sydney has her own house worth three million Australian dollars. And he has invested in another two apartments in the city’s popular eastern suburb. To finance it, he has taken bank loans of around three million Australian dollars. At the same time, the mortgage rates have come down below two per cent in recent years.
But like many countries, interest rates in Australia are rising rapidly. Because the central bank is trying to control inflation, which has reached a record high of 6.8 per cent by August.
Interest rate hike expected in the coming days
The Reserve Bank of Australia has raised interest rates for the fifth consecutive month. According to Reserve Bank Governor Philip Lowe, the official cash rate has been increased from just 0.1 percent in April to 2.35 percent in an attempt to control rising inflation. Banks have also passed on the benefit of increased loan rates to the customers. Now interest rates on loans are present between 4 and 5 per cent, which is expected to increase further.
Zhang said his repayments would soon double to around AUS$16,000, which he worries about. Their tenants are on fixed rental agreements and they cannot increase the rent any further. Along with this, he does not expect any big increase in his salary. According to the report, Zhang said that there is no time to panic. But concerns remain about rising loan prices. The fear of further increase in interest rates in the coming times has also added to their concern.