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A change in interest rate prices will leave some Launceston households with no choice but to sell, with prices soaring and stocks low leaving a mortgage broker wondering when the bubble will burst. Liberty Lending broker Ryan Pendergast, based in Launceston, said there had been a significant change over the past nine to 12 months of people looking to sign up for a fixed interest rate home loan. “What we’re seeing if fixed rate mortgages are actually cheaper than variable loans, which is very rare, we’ve never really seen that before,” he said. “However, there is a lot of pressure on the Reserve Bank of Australia to raise interest rates; they cannot come down. READ MORE: Is Tasmania’s COVID response being watched and sufficient review? “I know there are a lot of buyers out there waiting for rates to rise, to take advantage of investors and families forced to sell. March 2024. Assume variable rates increase by 0.5% by the end of 2022. In this case, as many economists have predicted, households in Launceston who bought near the current market peak could be face paying an extra $120 per month if banks choose to pass the increase on to consumers. Mr Pendergast said it was like looking into a crystal ball, trying to predict what would happen, but he said times were tough if you were a first-time home buyer. on the handouts: a pensioner said the rent to increase by $180 per fortnight “It’s really difficult and discouraging; it’s so emotional [if you are a first-home buyer], and they just can’t compete with some of the prices on offer,” he said. First-time home buyers are abandoning their search due to the inability to save for a deposit, despite being able to pay off a mortgage. Wage growth has not kept up with house price inflation, and Mr Pendergast said he was unsure how long the market could sustain those prices. “What we see here is comparable to Sydney prices, but we haven’t seen the increase in wages.” The median price of a house in Launceston has soared to $600,000, according to the latest data from the Real Estate Institute of Tasmania, which released its December quarter update last week. READ MORE: An uphill battle: The Derby community before and after Variable mortgage rates are tied to the official cash rate as it dictates how much banks can borrow money from institutional lenders Reserve Bank Governor , Philip Lowe, conceded this week that it is ‘plausible’ that the cash rate uld rise this year; however, many economists use much more robust language. Tasmanian economist Saul Eslake said recent inflation figures led him to predict a 0.5% rise in official rates by the end of the year. Canstar said buyers trying to get a foot on the real estate ladder over the next two years would also suffer from rising rates, with new borrowers taking a hit to their borrowing power. If rates were to increase by 1.65%, a couple with a household income of $90,000 a year could see a reduction in their borrowing power of $92,000, depending on what they would qualify for. interest rate from 3.04% to 4.69%. Mr Pendergast said he would advise those who have been on the property hunting treadmill for a while to take a break as it can be exhausting. WHAT DO YOU THINK? SEND US A LETTER TO THE EDITOR: Our reporters work hard to bring local, up-to-date news to the community. Here’s how you can continue to access our trusted content: