Lower House Prices VS Rising Interest Rates

What to do when faced with rising interest rates and decreasing house prices is the biggest hurdle for many first home buyers. Rising interest rates tend to put the brakes on new property purchases, particularly at a time when household budgets are being stretched by high inflation. However, buying in a lower priced market makes financial sense for a few reasons:

• There are more listings to choose from and fewer investors to compete with. Less pressure in the market means there’s more time to do due diligence and make considered decisions.
• If history tells us anything it’s that property moves in a cycle and house prices are likely to climb again. Getting into the market while prices are lower could offset a higher interest rate, provided you can afford the higher repayments.
• Vendors are more likely to negotiate on price at this time so buyers may be able to get the house of their dreams for a better price.
• Lower prices mean borrowers won’t have to save as big a deposit which could be the difference between buying now or waiting for several years to save more.