The size of mortgages potential property buyers can take on has been cut by a fifth due to aggressive increases in official interest rates, the Reserve Bank has revealed.
Sydney house values fell 2.6 per cent in August and have now edged down by $927 a day since the end of April. In Melbourne, values fell another 1.5 per cent last month to be down by $51,000 over the past five months. But the increase in official interest rates since May was having a much bigger impact on how much people could borrow.“Given this 225 basis point [2.25 percentage point] increase in the cash rate has been fully passed through to mortgage interest rates, it will have reduced borrowers’ maximum loan size by around 20 per cent,” he said.
swrighteconomy What goes up must come down, let’s take heart!
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