The Real Estate Institute of Queensland (REIQ) says the Reserve Bank of Australia\u2019s (RBA) decision to lift the cash rate by another 25 basis points to 4.1% unfairly punishes borrowers for rising everyday essential costs that are entirely outside of their control.<\/p>\n\n\n\n
REIQ CEO Antonia Mercorella said the two rate hikes in as many months is piling on the misery to borrowing households who are already grappling with high housing costs and broader cost-of-living pressures.<\/p>\n\n\n\n
\u201cMany households are already feeling the squeeze from rising energy costs and other essentials, so the cumulative impact of back-to-back rate rises will stretch budgets even further,\u201d Ms Mercorella said.<\/p>\n\n\n\n
\u201cThis decision also comes at a time of heightened global uncertainty, with tensions in the Middle East adding volatility to oil markets.<\/p>\n\n\n\n
\u201cThe RBA is responding to inflation caused by increases in prices relating to these global issues, such as higher prices at the petrol bowser, but the cash rate remains its only real lever to fight inflation.<\/p>\n\n\n\n
\u201cUnfortunately, that lever is a blunt instrument \u2013 it affects all borrowers equally, regardless of whether they\u2019ve got high discretionary spending or are simply covering necessities.<\/p>\n\n\n\n
\u201cBorrowers can\u2019t change the price of electricity, insurance or fuel, yet they\u2019re the ones copping higher mortgage repayments – and the financial strain is compounding.<\/p>\n\n\n\n
\u201cMonetary policy can only go so far. The real issue is what\u2019s holding back productivity in the economy \u2013 challenges that only the Federal Government can address.<\/p>\n\n\n\n
\u201cFor a borrower with Queensland\u2019s average new owner-occupier loan of around $690,000, today\u2019s increase could add roughly another $105 to monthly repayments.[1]<\/sup><\/a> <\/sup> <\/p>\n\n\n\n \u201cWhen combined with the February rate rise, that\u2019s an additional mortgage burden of around $200 per month or $2,400 a year.\u201d<\/p>\n\n\n\n Along with hitting hip pockets, the REIQ also warned that the RBA\u2019s move also delivers another blow to aspiring home buyers\u2019 confidence and borrowing capacity.<\/p>\n\n\n\n \u201cA single buyer earning Queensland\u2019s average full-time income of $103,450 could see their borrowing capacity fall by around $14,000, while a dual-income household with children may see a drop in borrowing power by around $27,000,\u201d Ms Mercorella said.[2]<\/sup><\/a><\/p>\n\n\n\n \u201cCoupled with current tight rental market conditions, that makes it even harder for aspiring home buyers to transition into home ownership at a time when affordability is already stretched.\u201d<\/p>\n\n\n\n ENDS [1]<\/a> The average loan size is derived from ABS Lending Indicators<\/a>, Table 4. The cost calculation assumes a 5.75% current mortgage rate based on Statistical Table F6 \u2013 Housing Lending Rates<\/a>] (which is 5.5%, following a full pass-on of the 0.25 percentage point cash rate increase.) and a principal and interest loan repaid over 25 years. The calculation was made using Mortgage Repayment Calculator – RateCity<\/a>.\u00a0<\/p>\n\n\n\n [2]<\/a> The estimated annual salary of $103,450 is based on the ABS Trend value for average weekly full-time adult ordinary time earnings in Queensland reported in ABS Average Weekly Earnings<\/a>. In estimating the borrowing capacity for a couple, both are assumed to earn this amount each. A current variable interest rate of 5.75% from RBA lenders interest rates was assumed. The calculations assume no dependents and average bills\/living expenses are $1,900\/month for single and $6,600\/month for couples with two kids based on Muval data.<\/a> The CANSTAR home loan borrowing calculator<\/a> was used.<\/p>\n","protected":false},"excerpt":{"rendered":" The Real Estate Institute of Queensland (REIQ) says the Reserve Bank of Australia\u2019s (RBA) decision to lift the cash rate by another 25 basis points to 4.1% unfairly punishes borrowers for rising everyday essential costs that are entirely outside of their control. REIQ CEO Antonia Mercorella said the two rate hikes in as many months is piling on the misery to borrowing households who are already grappling with high housing costs and broader cost-of-living pressures. \u201cMany households are already feeling the squeeze from rising energy costs and other essentials, so the cumulative impact of back-to-back rate rises will stretch budgets even further,\u201d Ms Mercorella said.Read More →<\/a><\/p>\n","protected":false},"author":1279,"featured_media":4987,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mbp_gutenberg_autopost":false},"categories":[3,8,7,6,29,53],"tags":[],"_links":{"self":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/4986"}],"collection":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/users\/1279"}],"replies":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/comments?post=4986"}],"version-history":[{"count":1,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/4986\/revisions"}],"predecessor-version":[{"id":4988,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/4986\/revisions\/4988"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media\/4987"}],"wp:attachment":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media?parent=4986"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/categories?post=4986"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/tags?post=4986"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
Media enquiries: <\/strong>Claire Ryan, REIQ Media Manager, M: 0417 623 723 E: media@reiq.com.au<\/a><\/p>\n\n\n\n
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