Some happy surprises for all

Homeowners can look forward to some positive outcomes from the looming interest rate rises, says personal finance writer Anthony Keane

EASTER eggs will soon be spreading their chocolatey goodness across Aussie suburbs, but they’re not the only type of Easter egg that can make property watchers smile.

Increasingly popular in movies, video games and other media, “Easter eggs” have another definition: a surprise bonus hidden inside something that brings happiness to those who find and understand it.

Think of Star Wars droids R2D2 and C3PO making a surprise appearance in

Indiana Jones and the Raiders of the Lost Ark, or ET appearing in a Star Wars film, or a Captain America movie celebrating Samuel L Jackson’s classic Pulp Fiction character, or the free dinosaur game you get by typing chrome://dino/ into your Google browser. And, just quietly, there’s a few Easter eggs hidden in Australian housing at the moment – on top of those silently sitting in the closets and cupboards of peoples’ homes. Amid increasing worries about the Reserve Bank’s looming interest rate rises and falling house prices, there are pockets of positive surprises awaiting homeowners, home buyers, investors and renters.

1. THE JUNGLE GETS NICER

Australians have been aggressively fighting for housing, whether buying or renting.

As prices cool and supply pressures are eased by rising mortgage interest rates, the battle won’t be so scary.

2. PRICE CRASH PREVENTED

For two years there has been no immigration as Covid shut down our international borders. Yet in that time our property prices have climbed strongly. It’s a good sign for housing strength when population growth resumes.

Some people may think heavy property price falls are coming, but they may be forgetting that hundreds of thousands of new Australians will be moving here in the next few years – helping to keep demand for housing solid.

3. MORE MONEY IN YOUR POCKET

Interest rates rise because inflation is rising, and rising inflation should bring rising wages. The ultra-low interest rates we’ve had for several years have been great for borrowers, but have meant weak wages growth and almost no benefits from bank deposits for savers, retirees and first home buyers. Rate rises will push up mortgage costs but also deliver extra income.

4. A TRAVEL BONUS

Aussies have been starved of international travel since early 2020, and many are tentatively planning to head overseas soon.

A positive surprise from rising interest rates is often a higher Australian dollar, giving travellers more purchasing power overseas.

5. INVESTMENT CHOICE

Even if housing looks a little shaky in your capital city, Australians can freely invest in other states where real estate price cycles are different and bargains may be more freely available. This investment choice also delivers potential tax and diversification benefits to investors, so don’t discount it.