10 Jun, 2024
Mortgage Broker Comments Off on Why Haven’t High Interest rates stopped house prices rising?

With interest rates on the rise, one would expect property values to take a hit.
However, that’s simply not been the case. Despite the surge in rates, property values
across most of the country seem resilient and, in many regions, still growing rapidly.
So, why is this happening?
CoreLogic highlights three potential reasons behind this phenomenon:

    1. Population Growth: There’s been record immigration over the past twelve
      months, increasing population growth. Supply is low with home construction
      approvals at very low rates and soaring demand.
    2. Tight Rental Markets: Rental markets are experiencing a squeeze, leading
      more renters to consider homeownership instead. This increased demand
      from renters is further driving up property values.
    3. Cash Buyers: Interestingly, there’s been a surge in activity among buyers
      who don't rely on home loans. These cash buyers are injecting liquidity into
      the market, contributing to the resilience of property values.

So, what’s the takeaway from all this? If you’re waiting for property values to dip
before entering the market, you might be in for a long wait. Timing the property
market is notoriously tricky, and waiting for the perfect moment could mean missing
out on opportunities. It may never happen, history shows they will likely keep rising.