05/02/2008 - 14:48

Renters and first home buyers will feel rate rise: REIWA

05/02/2008 - 14:48

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The Real Estate Institute of Western Australia said today's lift in the official cash rate by the Reserve Bank was disappointing but not surprising.

Renters and first home buyers will feel rate rise: REIWA

The Real Estate Institute of Western Australia said today's lift in the official cash rate by the Reserve Bank was disappointing but not surprising.

REIWA president Rob Druitt said the WA property market was 'cool and stabilising' after the boom and did not require any further brakes applied to it.

"The average mortgage in WA is now $261,000, so today's rate rise will add around $12 per week, or $600 per year, to a typical mortgage," Mr Druitt said.

However, Mr Druitt said most Western Australians were in a better position to absorb the rate rise than home buyers on the east coast.

"With our stronger economy and higher than average wages and salaries, most Western Australians will largely take this rate rise in their stride and simply rein in some consumer spending from other areas of their lives," Mr Druitt said.

Mr Druitt said where the rise will be more keenly felt is by first home buyers and renters.

"People trying to enter the housing market for the first time will find this added cost difficult and they'll need to factor that into their purchasing power and borrowings.

"The rate rise may also impact on the rental system, placing some upward pressure on rents as landowners try to recoup some of their additional costs," Mr Druitt said.

Mr Druitt said that despite a series of rate rises in recent times WA homebuyers were still financially in front having achieved strong capital growth over the last few years.

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