By Phillip Rodda
Interest rates will stay on hold tomorrow according to one of Australia’s top economists, but pain could be ahead for Sunshine Coast property owners.
The Reserve Bank will meet on Tuesday to make their rate decision.
Former chief economist at BT Financial Group, Dr Chris Caton, said there was no reason for the Reserve Bank to adjust interest rates.
“No change, when you’re on a good thing stick to it,” he said.
Interest rates have remained unchanged at a record low for nearly two years, with the last change occurring in July 2016.
It is expected that interest rates will only increase from this point, albeit very slowly.
In the past few years, the Sunshine Coast has become one of the hottest property markets in Queensland, but any hike in interest rates could affect more than just mortgage repayments.
Real estate expert Pete Wargent said despite the growth and demand in the region, the Sunshine Coast would not be immune to the effects of rate increases.
“Higher interest rates depress the demand for mortgage credit and therefore housing,” he said.
“Arguably the Aussie dollar as a factor impacts the coastal regions, such as the Sunshine Coast, more than elsewhere, lower dollar means more tourism over time.”
However, he also does not think things will change for some time.
“Banks are generally tightening up how much borrowers can borrow, so it’s likely to keep a lid on things, at least for a while,” he said.