Interest rate rises scary for property investors

Sharon Zollner

ANZ chief economist Sharon Zollner, senior economist Miles Workman and senior strategist David Croy say while they expect the Government’s policy changes to take the wind out of the market’s sails a little faster than otherwise, it’s possible that would-be investors only hit pause temporarily while they work out the implications of the change.

“However, interest rate rises are scarier because of the number of highly indebted households which would be vulnerable if they were to increase or incomes were to deteriorate,” says Zollner.

“For investors, interest rate increases will no longer bring a larger tax offset.

“There’s now a greater chance rises in interest rate increases could cause investors to sell up, meaning a faster braking impact on the housing market than previously.”