Experts warn the latest 25-basis-point rate hike by the Reserve Bank could strain Logan’s residents’ finances and deter first-time home buyers.
The cash rate was last week raised to 4.35 per cent, as predicted by the major banks.
This marks the 13th rate hike this cycle, the first since June this year, and the highest level since November 2011.
REIQ COO Dean Milton said the increase would affect Logan more than other areas in Queensland.
“In Logan, 40 per cent of residents have a mortgage compared to the state average of 34 per cent – meaning the area is more susceptible to interest rate rises,” Mr Milton said.
“The latest annual median house price for Logan LGA sits at $620,000.
“For those that have a $500,000 mortgage, a 0.25 per cent hike rise represents an extra $76 per month.
For a mortgage of that size, Mr Milton said, the total increase was $1210 a month since March last year when the hiking cycle began, which is a 52 per cent rise.
“In addition, interest rate rises make it harder to aspirational first home buyers to get their foot on the property ladder,” he said.
“In Logan, home ownership levels are sitting below the state average at 62 per cent, and we would like to see a lift in these levels right across the state to help Queenslanders out of the housing crisis.
“We also know that building approvals are nowhere near where they need to be in Queensland, with 33,755 new dwellings approved across the state, falling well short of the 40,000 or more per annum we need just to meet SEQ demands.”
Mr Milton said this was a “dismal approval rate” that matched the levels seen in the 1980s where there was “practically half of today’s population to cater for”.
“Further, loans for construction of new builds are at record lows in Queensland signalling a kink in the pipeline of future new housing supply.”
