Rising interest rates are directly reducing what buyers can borrow, and therefore what they’re willing to pay for property in Officer and Pakenham. The impact of the two recent rate rises is particularly noticeable for family homes in this price bracket.
How much borrowing capacity has changed?
A buyer who could borrow $750,000 six months ago may now only qualify for $620,000 to $640,000. This squeeze is hitting hardest in the $650,000 to $850,000 bracket – exactly where most family homes in Officer and Pakenham sit.
What does this mean for pricing?
Properties priced to reflect the current buyer pool are selling. Overpriced properties are sitting on the market. It’s crucial to price realistically, not based on past expectations.
Why are homes still selling?
Life events continue to drive the market regardless of interest rates. Families grow, jobs change, and people need to downsize. Demand remains consistent due to ongoing population growth in Melbourne’s South East, and buyers active now are generally committed, not speculative.
The honest reality
Homes that launch above the current buyer pool develop market stigma fast. Buyers assume something is wrong with a property that has been sitting. That assumption costs you more than a correct price from day one ever would.
Questions to consider
- What is the current borrowing capacity of your likely buyer?
- How does your property compare to recent sales in the same precinct?
- Are you prepared to adjust your expectations to meet the current market?
Talk to KR Peters for a straight-talking appraisal with no obligation.
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Market information is general in nature and reflects conditions
at the time of publication. For advice specific to your property,
contact KR Peters.