sydney balloons
Prices are set to continue their rise in Sydney. Image – Canva.
  • All the experts unanimously agreed the cash rate would not increase on Tuesday
  • House prices across the capitals expected to increase 6-9% over the next 12 months
  • Half of homeowners concerned about interest rate rise

In the lead-up to the Reserve Bank of Australia’s (RBA) monthly meeting on Tuesday, consumer group Finder welcomed experts and economists to weigh in on various issues surrounding the economy.

Unsurprisingly, all panellists correctly predicted the cash rate would stay on hold, while the vast majority (86%) believed the current wave of lockdowns would not burst the property bubble.

Experts are predicting the property market will continue to rise for the next 12 months.

Melbourne, the experts predict, will witness a 9% price increase that would make the average home $817,114.

In Sydney, an 8% increase is predicted, taking the predicted price in July 2022 to $1,070,917 – or an increase of $76,619.

All the other capital cities have forecasts between 6% and 8%.

Finder’s head of consumer research, Graham Cooke, said the lockdowns appear to have had little effect on the sales of houses.

“The average Sydney homeowner earned more than the median family wage over the last 12 months in property equity alone, and it looks like they are set to repeat that over the next 12,” Mr Cooke said.

“In both Sydney and Melbourne, the number of houses sold per month remained relatively flat through 2020 and early 2021, before skyrocketing when lockdowns were lifted.

Graham Cooke, Finder

“After lockdowns were eased, the number of properties being sold increased by around a quarter.

“In other words, while lockdowns didn’t dampen the housing market much, the ending of them lit a fire that is still going.”

Mortgage holders fear a rise in rates

Other research from Finder has found that 53% of homeowners are concerned about interest rate increases on the horizon.

15% fear they may not be able to make their repayments.

Mr Cooke said he is concerned about some homeowners who have purchased beyond their means.

“The past 12 months have seen property prices explode as record numbers of Australians have fled into the housing market,” he said.

“Low interest rates have encouraged many buyers to purchase earlier than they otherwise might have for fear of missing out.”

“But not all of them will have budgeted for their monthly repayments to go up if or before the cash rate increases.”

Analysis by Finder has found that the average monthly mortgage payment in Sydney is worth about 76% of after-tax earnings for the average worker. This is the highest in the country with Melbourne behind at 57% followed by Canberra (49%) and Hobart (49%). Perth has the lowest at 35%.

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