Most coast mortgagees prepared for rate rise
By BELINDA SCOTT
CHRISTINE Clark says she thinks the effect of yesterday's 0.25 per cent interest rate rise by the Reserve Bank is going to be a lot of nothing.
"I think it was so well flagged ? we're really been talking about it for the whole of this year and the last interest rate rise was absolutely a non-effect," said Ms Clark, the chairperson of the Real Estate Institute of NSW and a principal of Raine and Horne Coffs Harbour.
"We had more people turning up at auctions and inquiring about property than normally in the week after the last interest rate rise and with the second one, I think it's going to be more of the same.
"It will mean about $25 a month extra on a house in Coffs Harbour and I think a lot of people have taken that into consideration early in the process and locked in their mortgage rates.
"People are much more savvy these days."
Reserve Bank governor Ian Macfarlane said economic activity was strong across Australia and inflation pressures had increased. The move takes the official cash rate to six per cent, the highest since early 2001.
CommSec chief equities economist Craig James said although it was expected, he hoped it would be the last interest rate hike for a while, because it would hurt families and slow the economy.
But Ms Clark said bank interest rates of around seven per cent were still at historically low rates.
Val McMurray, the secretary of the Sawtell branch of the Combined Pensioners and Superannuants Association, said she expected 'a few of us will be cheering' the increase in interest rates which would add a few extra dollars to those with incomes from investments. But she also knows the pain a mortgage can cause.
Mrs McMurray said even with both she and her husband working, they had struggled to pay the 17.5 per cent interest rates in the 1980s.
She recalled they had started with a small flat, then an old house.
"We got the house of our dreams after we retired," she said.
"I feel a lot of young people tend to overextend themselves.
The interest rate rise has been slammed by the NSW Government, Housing Industry Association and a North Coast research group.
They have said it is unjustified and will squeeze small business, families and renters, depress the housing industry and provide no solution for inappropriate development.