Another rate rises to risk mortgages on the Border, says REINSW chief executive

As widely anticipated, the Reserve Bank of Australia on Tuesday announced its decision to further increase the nation's interest rate by 25 basis points, bringing the cash rate to 3.35 per cent.

Real Estate Institute of New South Wales chief executive Tim McKibbin, speaking in Albury at the REINSW roadshow, said the increase would spell trouble for mortgage holders on the Border.

"It is not good for the community," Mr McKibbin said. "Very sadly, I think we are going to see an escalation in mortgage stress.

"With the eight consecutive rate rises, the serviceability of debt in most instances has gone up substantially.

"This is an overused expression but it is the perfect storm. Wages just have not gone up at that rate, " he said.

Mr McKibbin said tree changers who moved to the region during the pandemic had contributed to the crisis in housing availability, which he said was another battle to inflation.

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"You don't sell your property in Sydney. You hang onto it and you rent or buy a property out in Albury, so now you are consuming two properties instead of one," Mr McKibbin said

"All of a sudden, the locals are being pushed out of the market.

"Government is dealing with the symptoms of the problem but the underlying problem is we do not have enough property," he said.

With the cash rate at its highest point in over a decade, it and future rate rises are set to be passed on to renters and homeowners. National housing campaign Everybody's Home, which is supported by services including Junction Support in Wodonga, says tax breaks keep renters at a disadvantage as investors are able to make claims from losses.

The Parliamentary Budget Office has modelled that the cost of negative gearing and the capital gains tax discount will reach $157 billion over the next decade, which is more than the estimated cost to address social and affordable housing shortfall at $145 billion.

"Housing in Australia is rigged against renters. Instead of helping people afford a decent home, the Government is spending billions lining the pockets of investors," Everybody's Home spokesperson Maiy Azize said.

"A fairer system would give renters genuine choice and security. The Government can make that happen by investing in social and affordable housing, instead of spending billions on tax breaks for investors.

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