Finance guru Mark Bouris has predicted besieged homeowners may be forced to sell in a “fire sale” as high interest rates “start to bite in”.
Yellow Brick Road Home Loans Executive Chairman Mark Bouris predicts property prices will not continue to rise at the rate they are.
Mr Bouris says he is expecting the housing supply to increase during the spring period as people feel the full effect of interest rate rises.
“People are hanging out to see whether or not this rhetoric which we’re hearing at the moment, ‘oh, house prices are going to go up’, before they sell,” Mr Bouris told Sky News Australia.
“If they don’t see that period, they’re going to have to sell, and they’re going to sell to a big supply market.”
Last week, the former host of The Celebrity Apprentice Australia said he was “filthy” after the Reserve Bank (RBA) chose to increase interest rates a further 25 basis points to 4.1 per cent, warning the move is the “nail in the coffin” for besieged homeowners.
During an appearance on Sky News Australia with Peter Stefanovic on Wednesday morning, Mr Bouris doubled down on his criticism of the RBA and revealed he does not expect housing prices to increase.
Mark Bouris has continued to sound the alarm on Australia’s housing woes. Image: Sky News Australia.
The Yellow Brick Road Home Loans Executive Chairman explained the first factor that supports rising property values is when “demand outstrips supply”.
“Usually increases in demand are caused by more affordability and more affordability is caused when interest rates fall,” he said.
“The second thing that can create house price increases is if supply stays the same, in other words very low.
“I’m expecting supply to increase because we’ve had a low supply of housing over the last six months (and) when supply increases house prices tend to go down not up.
“The reason I think housing supply will increase is because the fixed rates will start to bite in,” he warned.
“A fire sale?” Stefanovic asked.
“Yeah, correct.”
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Mr Bouris said he is expecting the housing supply to increase during the “spring period” as people feel the full effect of interest rate rises and more households transition from fixed to variable interest rates.
“People are hanging out to see whether or not this rhetoric which we’re hearing at the moment, ‘oh, house prices are going to go up’, before they sell,” Mr Bouris said.
“If they don’t see that period, they’re going to have to sell, and they’re going to sell to a big supply market.”
“I’m expecting house supply to increase because the fixed sales are going to set in and a lot of agents are telling me people are hanging out they’re going to sell into a big supply crisis.
NAB predicts that the RBA may increase interest rates to 4.6 per cent by August. Picture: NCA NewsWire/Joel Carrett
Stefanovic then asked Mr Bouris what will happen if the RBA chooses to increase interest rates further in line with predictions by major banks.
On Tuesday, NAB revised its forecast for interest rates and predicted the official cash rate will reach 4.6 per cent by August.
“If you put interest rates up two more times, like NAB is suggesting, then totally you’re going to get this position where affordability is non existent and those people who currently have a home loan are going to be in a lot of strife,” he said.