Launceston local Katie Marriner has been trying to buy a house since the start of 2020, but until recently, none of her bids came close to beating out competitors.
"I've been bidding since at least the start of covid, but it was just crazy - people were going $30,000 to $100,000 over the asking price," she told The Examiner.
Her luck changed earlier this year - she successfully bid on a house in Mowbray, and the deal settled in June.
Katie is one of a number of young Tasmanians that is gaining a foothold on the property ladder for the first time because of falling house prices triggered by climbing interest rates.
The Reserve Bank has boosted rates three times in the past three month as part of its effort to stamp out inflation, and new data released this week showed that the effects on Launceston's property market are already being felt.
According to Corelogic, median house values in Launceston and the North East stalled in May, and fell by 0.9 per cent in June.
The Reserve Bank has now raised its official cash rate target by 1.25 per cent since April, and banks have been quick to pass on the extra costs to borrowers, helping to dampen both inflation and demand for houses.
"I think that's how I got into the market - I only bid $30,000 over asking price, and I think the only reason it was accepted was because so many people are scared of the rate rises," Ms Marriner said.
For borrowers on variable rate mortgages in Tasmania, where the average mortgage is about $450,000, monthly repayments have increased by about $307 since April.
But many, like Katie, have already fixed their mortgage at set rates.
"I was worried about the rates rising - the first increase happened before I'd even moved in," she said.
She locked her mortgage in at 4.25 per cent last week - a quarter of a percent below what her variable rate would have moved to after the latest increase.
Launceston construction sector manager Carl Tailor locked his interest rates in last year at 3.4 per cent after seeing prices for building materials start to shoot up.
"If we hadn't done that, I'd hate to think where we would be now ... the interest rates are now about 2 per cent above where we fixed it, which is crazy - and it's going to get worse," he said.
"We will survive, but it's only because we made wise decisions six months ago."
He said he has saved about $100 per month as a result of fixing the mortgage rate.
Nowadays, he said cost of living increases were the most worrying, and understands why the Reserve Bank needed to boost interest rates to stamp out inflation.
"Living in Evandale and driving back and forward, just my fuel bill alone has gone up $40 a week at least. So [the Reserve Bank] had no choice - it's either that or inflation."
On Wednesday, the four major banks passed on the rate increase in full to customers. A spokesperson for Bank of us said a possible increase in its loan rates would be discussed on Thursday.
Mystate Bank CEO Brett Morgan confirmed his bank would increase interest rates on its standard variable rate mortgage by half a percent starting on July 18.
"This is a challenging time for many Australians," he said.
But there was good news for savers - the bank is also boosting the rate on its flagship term deposit by the same amount, taking the payout to 3.35 per cent for a 24-month deposit. The new rate takes effect from July 18.
"Today we are announcing an increase of 50 basis points to our multi-award winning Bonus Saver account for the second month in a row, which is good news for customers."
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