Top Headlines Week 26, 2022
- Posted By David Brown
Demand I the rental market has continued to increase, and this has also affected the prestige rental market. The most expensive rental to ever hit the Gold coast market with an asking price of $7,500 per week, with a $30,000 bond. The beach house is located on Main Beach Pde, Main Beach, and is currently the sixth most expensive long-term rental in the country. The property was recently purchased by a local buyer for $9.8M, setting a suburb record. The four-storey home is only eight left in the suburb with direct beachfront access. The Gold Coast is one if Australia’s fastest growing regions in the country. It is predicted that the population will increase from 560,000 to 820,000 in just over 10 years. It is the mass amount of people that have moved to the region over the past two years that has fuelled the active market, and the shortage of stock availability.
Australia has ranked most likely to face property price falls, a new ranking shows, after prices drastically increased over the past two years. Proeprty prices are high when compared to rents and incomes and although experts are warned that prices are expected to fall, they may not reach low enough to get back in line with fundamentals. The Organisation for Economic Co-operation and Development (OECD) ranked Australia fourth for being a risk of a property price correction. New Zealand came in at first place, ahead of Czech republic in second and Hungary in third. During the pandemic central banks around the world, Australia included, cut interest rates to all time lows to support economies, which allows buyers to borrow more and ultimately pushed proeprty prices higher. Australia’s capital cities have been driving the downturn. Sydney home values are down 1.4% compared to three months ago. Melbourne has also fallen 0.8% over the last quarter. With the RBA expressing they will continue to increase interest rate until inflation stabilises at an acceptable rate, it is safe to say house prices will continue to fall in Australia.
Plans for a 15-storey mixed-use tower located in Gold Coast CBD have been lodged with the Gold Coast City Council. The art-deco-inspired Quest apartment Hotel is proposed tenant for the 76-key hotel portion with 30 private residential apartments located on the upper levels. The development located in Southport has taken inspiration from the nearby heritage-built Southport Town Hall and the Cecil Hotel in Southport’s CBD. The building with have views of both Main Beach Broadwater and the Gold Coast Hinterland. The development will comprise of eight short-term accommodation and six storeys of residential apartments. It will also have a communal recreation level which will include a gym, pool, and amenities. This will feed the high demand for rentals and owner-occupier homes that is such low supply over the recent months. This is also perfect for the 2032 Brisbane Olympics, as Brisbane accommodation fills up, Gold Coast will soak up the overflow.
As borrowing costs rise, Sydney and Melbourne have already felt the affects with prices dropping 3% and 1.8% respectively. It is expected that prices will continue to fall over the next 12 months. We are currently only in the early stages of the decline in the market, with the rapid increase of rate rises by the RBA a large contributing factor. Last week, almost 29% of properties scheduled for auction in Sydney were withdrawn from the market due to weak demand. This is the largest proportion since April 2020 when the initial wave of COVID arrived. Not only have prices begun to fall but homes are taking longer to sell. During the peak of the market in October last year, the average house only lasted 20 days on the market. This has now increased to 29 days. It is expected that many of Australia’s capitals will follow in this trend in the coming months as RBA continues to increase interest rates to fight high inflation.
Australia has just experienced the biggest rate hike on record which could put homeowners at the mercy of the Reserve Bank. On Thursday, CBA announced that its entire fixed rate offerings would increase by 1.4 percentage points, with none of its owner-occupier packages below 4.99%. This is the largest one-off hikes of this size and scale from the CBA on record. It is expected that other major banks will follow in CBA’s wake. The RBA is due to meet for its monthly monetary policy meeting this coming Tuesday. The RBA still hasn’t decreased inflation to an accepted and steady rate, so it is expected that rate rises are going to continue to happen over the coming months. It is unknown if they will make another large increase as what was seen in June. Philip Lowe, Governor of RBA said he is willing to push interest rates up to 4% to slow inflation.