Opinion: 'I'm taking one for the team' as interest rates rise

Alice Stolz, Domain’s National Managing Editor, The Block fixture and resident property aficionado, shares her insights each week as columnist for Nine Property.

A few weeks ago I wrote about the deafening silence around the demise of the great Australian dream. Even during an election campaign, no party seems to have enough gumption to have an honest conversation of how our country should tackle what is possibly our greatest crisis.

And then on Tuesday, after what felt like a terribly kept secret, the RBA announced they would increase the cash rate, for the first time in nearly 12 years.

The impact for those with a variable mortgage is that they’ll be paying back more on their loan than they were last month (it took barely a second for the banks to blink and pass the rate on).

Homeowners will do well to heed what the RBA are steering them towards; save, put any spare money aside for the rainy days ahead (ahem, future rate hikes) and batten down the hatches.

But if we have to find a silver lining in this dark cloud, it’s this: the knock on effect of higher interest rates is that it puts downward pressure on housing prices – prepare to see property prices soften.

For first-home buyers, living in one of the most expensive countries in the world, there might finally be a glimmer of hope on the horizon. The cost of the mortgage a new buyer wants to take out will increase, which quite simply, puts a ceiling on what that buyer can pay. Less frenzied bidding, no more stretching just a little bit further and no more ability to borrow just a bit more.do

And for mortgaged homeowners, of which I am one, tough as this may be and will further become, in the absence of policy makers tackling the issues surrounding home ownership, we are in fact helping the country head in the right direction. We’re taking one for the team.

It’s safe to say the lights are on and the party’s over. Let’s get on with the clean up and try to put the place back together, because it seems like if we don’t, no one else will.