Your experience with Interest rate rises

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From: Peter Davidson


This question goes out to those who have been through interest rate cycles.

What has been YOUR experience with a booming economy and mild interest rate rises, as we are about to see shortly?

Ie. more private sales, less auctions, price reductions, agents sucking up, etc...
 
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Reply: 1
From: Paul Zagoridis


I can't help with this particular rate cycle they're all different.

But MY experience was rates moved from 13.5% to 18% on first mortgage residential and 15% to 33% on commercial loans ;-)

Now 13.5% to 18% is a 33.3% rise. That's equivalent to a rise from 6% to 8%. How's that for perspective?

Agents at the time said now is best time to buy. Bargains were everywhere, but people were too scared to buy (where will it end?).

My properties would have been worth 130K (allegedly) at the absolute peak, sold for 85K at mortgagee in possession auction. In reality real valuations would have fallen by 10% after rising by 100% over three years.

Hope this answers some of your questions

Paul Zag
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