Eventus Financial Featured in The Adviser: Rate Hikes Wipe Out Property Affordability Gains

As Featured in The Adviser | Expert Commentary By Alex Veljancevski

Eventus Financial Founder and Director Alex Veljancevski has been featured in leading Australian mortgage industry publication The Adviser, providing expert commentary on how rising interest rates are eroding borrowing capacity and offsetting the potential benefits of falling property prices.

The article explores new mortgage modelling showing that even modest declines in Australian property prices may not be enough to improve housing affordability when higher interest rates reduce the amount buyers can borrow.

Alex highlighted the significant impact of successive RBA rate increases on home loan borrowing power, explaining that a cumulative 1% increase in mortgage interest rates could reduce maximum borrowing capacity by approximately 10%.

Using an illustrative example, Alex explained how a buyer previously eligible to borrow $800,000 could see their borrowing capacity fall to approximately $720,000, representing an $80,000 reduction in purchasing power.

The article reinforces the challenges facing Australian first home buyers, particularly those who may be expecting falling property prices to make entering the housing market easier.

Alex's commentary highlights why borrowers should look beyond property prices alone and consider how interest rates, lender servicing assessments and borrowing capacity collectively influence their ability to purchase a home.

The feature demonstrates Eventus Financial's expertise in mortgage lending, borrowing capacity assessments and helping Australians navigate changing property market conditions.

Read the full article in The Adviser

Borrowing capacity estimates are illustrative and depend on individual financial circumstances, applicable interest rates and lender assessment policies.