Isaac Poole of Oreana Expects Series of Mortgage Rate Hikes | Examiner

news, local news, interest rates, mortgages, home loans, Isaac Poole, Oreana Portfolio Advisory Service, real estate market, real estate

Big banks are set to repeatedly raise mortgage interest rates, potentially putting marginal borrowers in a world of distress, warns an international investment expert. “Australian homeowners and retail investors should prepare for higher mortgage rates and slower house price growth,” said Isaac Poole, global investment director for Oreana Portfolio Advisory Services, in a new report update. “We are confident that standard variable mortgage rates will increase. It could reach 100 basis points (1 percentage point) over the next 24 months.” Burnie-based Dr Poole said it would be a challenge for the house. “The risks are that mortgage rates are rising even faster than expected,” he said, said Dr Poole, said household indebtedness had increased and a sharp increase in mortgage rates could be a considerable challenge for marginal borrowing households. “The downside risk is that an increase in defaults or non-performing loans leads to a tightening of credit standards, a reduction in the availability of credit and a correction in house prices,” he said. he declares. Dr Poole said Oreana did not expect rates to drop. means that individuals should think carefully about their mortgage structure, ”he said. “Fixing rates over a longer period may be an option for those looking to secure loans. “It is important to note that we do not expect housing prices to fall in the short to medium term.” Dr Poole said residential real estate in growth areas had reached new highs and price increases were starting to spread “beyond growth areas into the suburbs”. He said Australian house prices rose almost 7.5% in 2021 and there was still upside potential for prices. The rate hikes he was considering would be independent of the Reserve Bank. The Reserve does not expect to increase the official cash rate anytime soon. “It will not increase the cash rate until real inflation is durably within the target range of 2-3%,” Reserve Bank Governor Philip Lowe said on June 1. “For this to happen, the labor market will need to be tight enough to generate significantly higher wage growth than it is now.” This should not be until 2024 at the earliest. “

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