First home buyers who bought during the recent property boom are in a vulnerable position as interest rates rise, the RBA says.
Rate rises hurting first home buyers: RBA
The central bank is worried first home buyers that bought during the COVID-19 property boom will struggle to meet their repayments.
In a report exploring risks to Australia’s financial stability, the Reserve Bank of Australia has identified recent home buyers as particularly vulnerable to rising interest rates.
Since May, the RBA has been hiking interest rates aggressively in response to soaring inflation.
Unlike more established borrowers, the RBA says first home buyers tend to borrow with small deposits and haven’t had a chance to build up their financial buffers and pay off a decent chunk of their loans.