Thursday 7 July 2022 04:54 AM Melbourne property investor, 22, impacted by RBA interest hike but internet has ... trends now
A property investor's dreams of owning 30 homes by his 30th birthday are shattered by the Reserve Bank's latest interest rate hike - and Aussies are unsympathetic.
Real estate investor Morgan Kouts bought two investment properties last year and planned to spend another $1 million on real estate in 2022.
However, the 22-year-old's plans were put on hold after the Reserve Bank of Australia increased interest rates to 1.35 per cent on Tuesday.
Senior property investment specialist Morgan Kouts, 22, (pictured) bought two properties last year when interest rates were at a record low. The value of his property portfolio has increased but so have his mortgage repayments following the latest interest rate hike
The Melbourne resident said he was committed to a variable mortgage rate so that he could use the equity from his existing properties to buy more real estate.
'It's obviously not the most ideal situation,' he told news.com.au.
'I tend to stick to variable rates and that way I don't need to break fixed rates,' Mr Kouts said.
'It obviously has an increased cost, to get that released in equity (sometime in the future).'
The July rate increase means the young investor owes an extra $300 a month on his property portfolio valued at $1.2million.
Despite last year's property market gains, the latest interest rate rise and cost of living has made it difficult for Mr Kouts to pay his bills.
The senior property investment specialist at Maple Property Group lives at home with his parents but claims he has a 'very strict budgeting system' and would rather have money out of his pocket 'building equity'.
Mr Kouts earns a salary just above six figures and secured his property loan after paying a 10 per cent deposit as well as lenders mortgage insurance.
Australians showed little sympathy for the would-be property mogul with many labelling him as 'greedy'
Australians have shown little sympathy for the would-be property mogul with many labelling him as 'greedy'.
'Because of greedy, selfish idiots like him house prices have been artificially inflated,' one Facebook commenter claimed.
'I have no sympathy for him, [I'd] rather cheer someone who bought their first property or two but not over 10 or more, too many people miss out because of these guys,' another comment read.
A number of users sarcastically suggested a GoFundMe page be created for the young property investor while other users highlighted the effect interest rate rises are having on Australians across the country.
'I'll send him my last dollar and I'll go without food and shelter just so he can have his 30 properties. Where is the gofundme to contribute to this poor poor man,' one user commented.
'Awww I got the feels for him.....how about all the homeless families to be created by the RBA,' another user wrote.
Another user commented: 'Some people can’t get a foot in the door to buy a house to live in because of this type of investment.'
The Reserve Bank of Australia (pictured, people walking outside RBA headquarters Sydney, NSW) has raised the cash rate in three consecutive monthly board meetings for the first time since 2010. The RBA cash rate stands at a three-year high of 1.35 per cent
Mr Kouts said he is speaking with his broker about moving to an interest-only payment plan.
In May last year Mr Kouts bought his first property, a four-bedroom home with two bathrooms for $467,000 on the outskirts of Melbourne.
Two months later, he snapped up a second property located in Ipswich, Queensland for $485,000 - which is now cash-flow negative.
A survey of 1,018 mortgage holders has found more than three-quarters of young Australians are more likely to switch all or part of their home loan to a fixed-interest rate.
The study, commissioned by money.com.au, found a whopping 77 per cent of respondents under 35 want to restructure their home loans compared with 55 per cent of 35-49-year-olds and just 31 per cent of over-50s.
Licensed financial adviser and money.com.au spokesperson, Helen Baker, said Australians want financial independence and are conscious of increasing interest rates, inflation and the downturn in the housing market.
'Young Australians will have bought recently and must contend with longer-term mortgages than Australians who entered the housing market many years ago,' Ms Baker said.
'Younger people are also more likely to have a larger home loan and be stretched, as a result of the booming housing market over the last several years.
'It is encouraging that younger
