Interest rate hike

The reserve bank today announced an increase of 0.25 percent in interest rate to 5.75%. Many families who are still paying of there home loans will be hard hit by this. Families with a loan of $200000 can expext to pay an extra $20 per month and those with a $400000 loan will pay an extra $68 a month. Some families may not be able to afford the increased payments and may be forced to sell or lose their home. It's a wonder what effect this increase will have on the house prices. New buyers will have to redo their maths and find out what they can now afford. I would expect house prices to drop if vendos wish to sell their house.

I am currently renting and still busy looking for a new home. My wife and I have been at if for about a year now and have seen drop in house prices over the year. Hopefully we will see a further drop in prices so that we could afford a new home.