The Reserve Bank of Australia (RBA) today announced it would raise the official cash interest rate to 6.75%, the second increase in three months.
“Whilst Adelaide is in the midst of a boom, there is no doubt that this rate rise will sting those who are most vulnerable,” REISA President, Robin Turner, said.
“The strong local market is regarded as robust enough to withstand this latest rise, but it will not go unnoticed.”
“Even though it was a highly anticipated decision and many buyers and homeowners may have already factored in the extra repayments, this rise will cause some hesitation, particularly from first home buyers.”
Although the Adelaide market has been red-hot in recent months, the regional areas have stabilised over 2007.
“With the drought having an impact on household budgets, particularly in regional areas, this latest rise will only compound these pressures,” Mr Turner said.
“This latest rise reiterates how important it is for buyers to always budget for interest rate rises and other factors such as property taxes when they assess how much they should borrow.”