Interest rate rise unwelcome in WA

The Real Estate Institute of Western Australia said today's lift in the official cash rate by the Reserve Bank was not surprising but was disappointing.

REIWA President Rob Druitt said the WA property market was 'cool and stabilising' after the boom and did not require any further brakes applied to it.

"The average mortgage in WA is now $261,000, so today's rate rise will add around $12 per week, or $600 per year, to a typical mortgage," Mr Druitt said.

However, Mr Druitt said most West Australians were in a better position to absorb the rate rise than home buyers on the east coast.

"With our stronger economy and higher than average wages and salaries, most West Australians will largely take this rate rise in their stride and simply rein in some consumer spending from other areas of their lives," Mr Druitt said.

Mr Druitt said where the rise will be more keenly felt is by first home buyers and renters.

"People trying to enter the housing market for the first time will find this added cost difficult and they'll need to factor that into their purchasing power and borrowings.

"The rate rise may also impact on the rental system, placing some upward pressure on rents as landowners try to recoup some of their additional costs," Mr Druitt said.

Mr Druitt said that despite a series of rate rises in recent times WA homebuyers were still financially in front having achieved strong capital growth over the last few years.

Related Items :

• Interest rate rise unwelcome and unnecessary
• Mandurah still very affordable : REIWA debunks 'clumsy' survey
• Interest Rate Rise Will Hurt Homeowners, REIQ Says
• Agents call for patience as rental crush resurfaces
• Perth house prices rise in December quarter
• House prices flat - rents up; REIWA releases data for the Dec quarter of 2007
• Perth house prices climbing again
• Rate rise blow for affordability