In this week’s edition of Top Tips Tuesday, we’re delving into a topic that’s been capturing attention – The Impact of Rising Interest Rates on the Queensland Housing Market.
Tip 1. How Many People Are Affected by the Rate Rise?
Approximately 25% of properties in Australia stand as fully owned without any mortgage, leaving the remaining 75% of homebuyers or investors directly impacted by the fluctuations in interest rates.
Within this segment, there exists a subgroup, primarily consisting of individuals with lower incomes or those who have borrowed up to their maximum capacity, who may face distinct challenges.
However, it’s noteworthy that a substantial majority of homeowners, boasting over two years of property ownership, have managed to build equity over time. Furthermore, their loan amounts remain comparatively lower, thanks to the recent surge in property values over the last couple of years.
Tip 2. Who Does This Affect the Most?
The pronounced impact is centred on those who have borrowed near their maximum limit, a demographic primarily comprising first-time homebuyers.
Drawing insights from historical data, we observe that even during periods of higher interest rates in previous cycles, property prices continued their upward trajectory.
Tip 3. Queensland’s Population Growth
Queensland is currently undergoing an annual population growth of 2% per year, making it the fastest growing region Australia, particularly in the vibrant landscape of Southeast Queensland. This surge is fuelled by increased migration, both interstate and international, resulting in a heightened demand for housing and subsequently exerting upward pressure on property prices.
Tip 4. Supply vs. Demand
At the heart of the real estate dynamics lies the fundamental interplay between supply and demand. Current figures for new builds in Queensland reveal a notable decline compared to two years ago.
Despite this decrease in construction activity, the influx of people into the region remains substantial, creating a scenario where demand consistently outstrips supply.
Houses and units are being snapped up swiftly, often before even reaching the open market, underscoring the existing imbalance between eager buyers and the limited availability of properties.
As you navigate the considerations of whether now is the opportune moment to make a real estate move or to await the unfolding impact of interest rate rises, I encourage you to reflect on historical trends.
If you find that you can comfortably afford it and can secure finance, the potential long-term benefits may outweigh any short-term uncertainties.
For a personalized strategy tailored to your situation, feel free to book a strategy call with me so we can discuss further. You can book a time with me by clicking here.
Thank you for your time, and I hope these in-depth insights prove valuable as you navigate the complexities of the current real estate landscape.
Regards,
Geoff Tomkins
Buyers Advocate
PH: 0404 852 781
