Interest rates 'scaring off' first-time buyers, says expert

First-time property buyers in Australia are being put off investing by the threat of rising home loan interest rates, it has been claimed.

David Airey, president of the Real Estate Institute of Australia, said the prospect of higher rates is 'frightening' prospective buyers," ABC News reported.

The comments could encourage a number of Australians to compare home loans online to ensure they get a rate to suit their needs before taking the plunge and buying a property.

Mr Airey told the news provider: "The threat of interest rate rises is there. We are constantly reminded that the Reserve Bank of Australia may continue to increase prices, so I think it will be a very flat year for first homebuyers and that will hurt the construction industry and the new home market in particular," he said.

It comes after a series of experts said that it is a case of when and not if interest rates are hiked up over the coming 12 months, with some predicting a rise by February 2011.

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