Just months after taking out a mortgage to buy her Norwood home, and Launceston cafe manager Samantha Sytsma is already worrying about having to cut back family spending.
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Soaring food and petrol prices and the recent interest rate rises have combined to explode her household budget.
"Since March, when we took over and bought our house, our mortgage payments have gone up nearly $200 a month in a few months. It's bloody nuts," she said.
"We've had to stop doing those things ... there are no treats [like ice creams] for the kids anymore. We've had to cut down time going away as a family, camping as a family, so we can pay our mortgage," she said.
Samantha and husband Jonnie are one of the many Tasmanian households that are preparing for another slug to the budget, after the Reserve Bank on Tuesday raised its cash rate target by another half a percent - the third month in a row that it has done so. It also raised the rate by 0.25 per cent in May.
If passed on in full by banks, the latest half a percent increase should ratchet up the payments on the Sytsmas' $400,000 variable rate mortgage by about $100 per month.
Ms Sytsma said it was tough having to consider whether to cut back on travel, or children's sporting activities - something she said she would never do.
Launceston Prices Continue Down Trend
"The only thing we can cut back on is that family time - making memories, because you can't afford to make those memories, which is really tough."
The interest rate increase came just after the release of data from real estate analysts Corelogic, that showed Launceston and north east median house prices continued to tumble last month.
The median value of a house in Launceston and the North East fell by 1 per cent in July, and 1.8 per cent over the past three months, according to the data.
The median house value in the city is now just under $582,000, down from $591,000 in May.
"The three months ending September 2016 was the last time we saw dwelling values across the Launceston and North East region fall by this much," said Tim Lawless, research director at Corelogic.
Tom Harrison, director of Harrison Agents Launceston, said the numbers showed that Launceston's housing market peaked some months ago.
"What we are seeing in the market is buyers certainly are remaining cautious," he said.
Given the sharp rise in prices in the year until November 2021, he said he was not surprised to see the prices cool off.
"A lot of the commentary from buyers is that they just want to wait and see what the market does. If we are seeing a 10-15 per cent drop in the next few months, I can understand why people are holding back and seeing the lay of the land."
He said he has not seen any distressed sales or mortgagee-in-possession sales - a type of bank foreclosure action - but thinks some may be around the corner.
"I think, especially at the peak of the market ... a lot of people were diving in and they haven't seen interest rate rises in a long time, so they probably weren't prepared for something to happen around the corner," he said.
RBA Hawks Fly
Inflation, which the Reserve Bank had thought to be temporary, has proved to be more resilient than expected.
It rose to an annualised rate of 6.1 per cent in the latest figures released last month, and all but guaranteed the Reserve Bank would continue to raise interest rates.
Like thousands of other Tasmanians, the Sytsmas family were caught out by the RBA's lightning shift towards an interest rate lifting cycle in its effort to stamp on price rises.
As recently as November last year, RBA governor, Philip Lowe, was telling Australians that the first lift in interest rates may not happen until 2024.
This latest cycle of interest rate increases is the most aggressive such cycle since then RBA governor Bernie Fraser raised interest rates in 1994, said independent Tasmanian economist Saul Eslake.
"I think the RBA is on a path that will see the cash rate at 2.5 per cent by the end of the year," he said.
That would mean at least three more rate increases of at least 0.25 per cent, Mr Eslake said.
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