Anthony Landahl

Because with a cooling market, there will be opportunities for buyers as well.

Yeah, look, higher interest rates do reduce borrowing capacity.

Essentially, it increases loan repayments and it increases ultimately the assessment rate.

If you were being assessed with the 3% buffer at 8%, your assessment rate becomes, for example, 8.25 or 8.5% if there's two rate rises.

If you get a 50 basis point increase, which might be two cash rate rises, your borrowing capacity might decrease from $35,000 to $40,000.

That means you're looking at a property that's

valued at $35,000 to $40,000 less than you were before.

So if we get two or three rate rises, if we, for example, get a percentage point increase, that's significantly impacting what people are able to borrow and potentially purchase, which might be the difference from buying a townhouse to a unit or upgrading from a townhouse to a house.

So it does have an impact on buyers.

Yeah, really interesting.

It's a salient point to keep investors and owner-occupiers separated because their behaviours right now are starkly different.

We had investor credit flows a month or two ago around 35% to 40% and home buyers was in the 20s.

So investors came back really, really strongly on the back of strong capital growth in some markets.

We were having cash rate increases, but with strong rentals, investors were making some good, strong long-term decisions.

It's really hard to read the game right now with investors.

As you make the point, the cost of funding a property is going up and potentially will go up again in May, maybe once or twice more this calendar year.

That does have a significant impact on investors.

I think the other thing that might impact investors is

the sentiment around the looming changes in the budget to capital gains tax concessions, where the concession, which is currently a 50% discount on the profit on your marginal tax rate if you own a property for over 12 months being slashed to 33%.

and negative gearing limited to two investment properties.