Triple whammy to hurt householders

PAKENHAM welfare groups say the triple whammy on household finances will cause the most hurt to those who can afford it least.

The 4Cs Food Bank and other support agencies are bracing themselves for a new rush on emergency food aid and other services.

Food Bank director Jeni Mathieson said the hike in interest rates on the back of increased credit card debt and forecasts of even higher rises in petrol prices had left many householders on the edge.

The Gazette reported recently that 4Cs was already spending $3000 a month on food for people in need and was still struggling to keep up with demand.

Mrs Mathieson said the Reserve Banks decision to raise interest rates even by a quarter of a percentage point would definitely have an impact.

Now theyre saying petrol could go up to $1.80 a litre as well, were shuddering at that thought; its a triple whammy, Mrs Mathieson said.

Were getting more and more clients who have their own home, even have two wages, but are stretched to the limit by their repayments.

Its so easy to get a loan, its another thing to pay it back and while it all looks good on paper it doesnt take much for it to go wrong.

Finding an extra $30 might not seem much to a lot of people, but to a family with four kids that might be bread and milk for a month.

The interest rates hike has increased the average mortgage of $220,000 by $35 a month.

Cheryl Quinn, principal of Pakenham Ray White Real Estate, said inquiries had dropped off since the rate rise was announced.

In particular the firsthome buyers market has stalled. People in the market for investment properties are still looking though, Ms Quinn said.

She said six groups of people had inspected local houses for sale with Ray White over a recent weekend, which was slightly down on normal figures.

I think the latest interest rate rise has made people a little bit reserved in buying property.

Ms Quinn also suggested rising fuel prices people were making people look at buying a house closer to their place of work.

Firsthome owners Gehan Dedigama and Kara Henzen are typical of the young couples buying or building in Pakenham, but are confident they can absorb the extra pressure on their weekly budget.

Mr Dedigama, who works in the financial industry, said the extra monthly payment was not a big issue for them, but acknowledged the circumstances might be very different for other homeowners.

It depends on the size of your mortgage, he said.

I dont think it will make a great deal of difference to our lifestyle but for families with children it could be a big problem especially if interest rates keep going up.

Mortgage Choice corporate affairs manager Warren ORourke said rate rise would place further pressure on homeowners ability to make ends meet.

He encouraged residents to reassess their budgets to facilitate smarter spending choices.

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