Are you considering buying a house in 2023? With rising interest rates, it can be difficult to know whether to wait or take the plunge.
While the forecast may be grim, relying on media alone may not give you the full picture.
“The bottom line here is that in the end no-one knows, so don’t rely solely on experts or media: do your own research.” Adrian Fisher, source
At Orchard Mortgage Brokers, our team of Sunshine Coast brokers recommends conducting thorough research and relying on up-to-date and reliable sources of information when making decisions.
In this blog post, we’ll explore the question on whether you should buy a house in 2023 amidst rising interest rates.
Australian Interest Rates on Hold April 2023
Following the release of the latest inflation figures from the Australian Bureau of Statistics (ABS), it was predicted that a cash rate pause would take place.
The ABS’s monthly consumer price index showed annual inflation of 6.8 per cent over the year to February – down from 7.4 per cent in January and a peak of 8.4 per cent in December.
This may just be a temporary reprieve – RBA Governor Philip Lowe has previously said the board would do what was necessary to get inflation back under control.
“The board is seeking to return inflation to the 2–3 per cent range while keeping the economy on an even keel, but the path to achieving a soft landing remains a narrow one,” he said.
“The board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary.”
Need help understanding what this announcement means for you? Contact the Orchard Mortgage Brokers team today!
What Does the Australian RBA have to say?
According to the March 2023 press release from the RBA, “The full effect of increased mortgage payments is yet to be felt”. Philip Lowe, source
The following quotes are also from the press release on 7 March 2023, Statement by Philip Lowe, Governor
“Global inflation remains very high”.
“It will be some time before inflation is back to target rates”.
“The outlook for the global economy remains subdued, with below average growth expected this year and next“.
“The Board recognises that monetary policy operates with a lag and that the full effect of the cumulative increase in interest rates is yet to be felt in mortgage payments. There is uncertainty around the timing and extent of the slowdown in household spending.
Some households have substantial savings buffers, but others are experiencing a painful squeeze on their budgets due to higher interest rates and the increase in the cost of living.”
Read full statement here – https://www.rba.gov.au/media-releases/2023/mr-23-07.html
If you have any questions about your mortgage payments or current financial situation, we can provide guidance and help you understand the current financial climate.
Should I wait for Interest Rates to Drop Before I buy a house?
It is important to carefully consider your full financial situation and ability to afford a mortgage before making a decision as big as buying a home.
Conducting thorough research and seeking professional advice is helpful in making an informed decision. At Orchard Mortgage Brokers, we like to take a long-term perspective when thinking about purchasing a home.
Don’t rush your decision. Take time to check your own financial position, speak to people who you trust and that understand the current financial and real estate markets.
We help our clients make informed decisions about whether to buy now or wait by developing solid financial plans and budgets.
Don’t feel like you need to find all the answers by yourself, Michael Wills and his team are here to help.
Should I wait for Mortgage Rates to drop before I refinance?
We believe there is no way to answer this without knowing your current financial position and understanding what your future plans might be.
We consider your unique position before refinancing any loans. We sit with you and ask a lot of questions! For example:
Why do you want to refinance?
Are you looking for a cheaper loan rate?
Do you want to increase your loan term?
Have you considered the costs associated with changing lenders and loans?
Has the equity in your home increased or decreased?
It is important to be aware of the changing lending landscape. Conducting thorough research and seeking professional advice are crucial for making informed decisions.
Waiting may have an impact on borrowing capacity due to lenders adjusting their lending criteria.
At Orchard Mortgage Brokers, our team is here to help you make informed decisions about whether to buy now or wait.
Will Interest Rates Go Down In Australia in 2023?
No one knows. We cannot possibly answer that with certainty. It is important to conduct thorough research and rely on up-to-date and reliable sources of information when making decisions.
At Orchard Mortgage Brokers, we live and breath this industry and keep a constant watch on what’s happening in the finance sector.
If we examine the RBA’s remarks in March, it could be inferred that interest rates will not be lowered.
Should I wait to buy a House in Australia 2023?
The decision to buy a house is a big one, especially when interest rates are rising. It is important to carefully consider your financial situation and ability to afford a mortgage before making a decision.
At Orchard Mortgage Brokers, we recommend taking a long-term view when thinking about purchasing a home and developing solid financial plans and budgets.
Waiting to buy may seem like a good idea, but it may have an impact on your borrowing capacity due to lenders adjusting their lending criteria. For instance, if you need to save more for a deposit, we can help you develop a savings plan and provide guidance on how much you need to save before you can comfortably buy a property.
Don’t feel like you need to find all the answers by yourself. Michael Wills and the Orchard team are here to help you make informed decisions about whether to buy now or wait.
Finally we think Chris Gray CEO of Your Empire summed things up nicely:
“Buy when (1) you can afford to buy and (2) you can afford to hold on for the long term, because that’s what home ownership and investing is all about when it comes to property.
So, no matter whether you’re looking for a home, investment property or holiday home, no matter whether you’re rich or poor, high income or low income, young or old, you’re generally always better off buying now rather than later.” Source
Get in touch with Orchard Mortgage Brokers with any questions you might have.
Licensing statements: Orchard Mortgage Brokers (Qld) Pty Ltd ACN 671 112 137 Trading As Orchard Mortgage Brokers is an authorised Credit Representative 556459 under Australian Credit Licence 389328 General disclaimer: This page provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply
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