PROPERTY experts are split on the impact rising interest rates will have on the regional property market.
This month, the Reserve Bank of Australia (RBA) increased interest rates to 1.35 per cent, compared to the 0.1pc earlier this year.
The RBA is tipped to continue increasing rates to combat rapidly rising inflation.
Ray White Rural director Hugh Ness said interest rates were one of the last things on farmers' minds, especially while the value of commodities was high.
"I don't think they will have much bearing on it at all, to be honest," Mr Ness said.
"Interest rates are potentially an issue, but at the end of the day they are offset by the price of commodities and what the farmers are getting for return.
"If they are making good profits, interest rates are probably not going to make much difference to them."
Mr Ness said farmers were driven by commodity returns, so if commodity returns remained as strong as they have been the interest rate "kicking up a per cent or two" was not going to make much of a difference.
The increase in input costs would be a bigger deterrent, he said.
"Obviously it's something you need to keep your eye on, but I don't know that it will actually be a major determining factor," he said.
"If you are worried about interest rates picking up a couple of per cent, then you're probably being a bit cautious, I suspect.
"The people that are cautious are going to miss out, because there are people out there who have a lot of cash in the bank who are prepared to roll the dice."
Taking a slightly more conservative approach, Elders Real Estate senior rural real estate executive Simon Cheetham said the rate increase would make buyers more cautious.
"It will make buyers be a bit more cautious, especially because we are talking about big amounts that people are borrowing to buy land at the moment," Mr Cheetham said.
"There will definitely be some caution, but as long as farms are profitable and making good money and the debt is serviceable, I think definitely people will not be afraid to keep buying land because of interest rates."
Mr Cheetham said current interest rates were still quite low compared to the past and shouldn't concern buyers too much.
"Interest rates are still very low by historical standards," he said.
"Most farmers will remember borrowing money at two or three times more expensive than what they've got today.
"Anyone borrowing money should always be allowing a good-sized buffer, so they don't get themselves into trouble."
While Mr Cheetham and Mr Ness don't foresee much impact from interest rate rises since the rural market is going so strong, Real Estate Institute of Western Australia deputy president Joe White said this confidence was misplaced.
"Interest rates have to affect property, there is no question about it, we are already seeing it have an impact," Mr White said.
"Even though the loans in recent times have been qualified to interest rates significantly higher than where they are - the bottom line is we've got so many market distortions out there."
The main market distortion concerning Mr White was inflation, mainly as a result of the various COVID-19 grants, and hence he said the RBA would be forced to continue to raise rates until inflation was under control.
"None of us really know where inflation is going to take us, because we spent a lot of our grandkids money with all these grants," he said.
"Inflation running the way it is, we are in for a tricky couple of years.
"You can neither conceal nor deny that.
"It's going to put a dampener on things and it's a good time just to be prudent.
"If you've got a few spare bucks, pay it off your mortgage."
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