Australian mortgage borrowers face 7.5% interest rates

House prices in regional areas of Queensland have the second highest growth rate in Australia

Property price growth in regional Queensland has recently reached the second-highest level in Australia. Although the peak has passed, the median price is still 47.1% higher than in March 2020.

The combined median house price in regional Queensland, including the Gold Coast and Sunshine Coast, is now $606,000, just $110,000 less than the Brisbane median.

January real estate data PropTrack's house price index shows that Queensland's best-performing suburbs last quarter were all in these regional areas, with Darling Downs seeing the largest increase in residential value, rising 2.81% in the past three months and an annual increase of 10.78%.

Followed by the Mackay-Isaac-Whitsunday region (quarterly growth of 1.21%, annual growth of 5.73%), Toowoomba (quarterly growth of 0.22%, annual growth of 8.58%), Gold Coast (quarterly growth of 0.15%, annual growth of 1.72%) , Townsville (up 0.1% quarterly and 4.19% annually) and Central Queensland (up 0.01% quarterly and 3.53% annually).

Brisbane's south was the only metropolitan area to see price growth in the same quarter, with a rise of 0.08 per cent, but saw an annual decline of 2.85 per cent.

The data shows that all other major areas experienced quarterly declines in house prices, while most areas showed annual increases, except for Moreton Bay South (a decrease of 2.02%), Brisbane West (a decrease of 3.16%), Brisbane Lisbane inner city (down 0.65%), Brisbane North (down 4.7%) and Sunshine Coast (down 4.36%).

Since the peak of the COVID-19 property boom, Brisbane residential prices, including houses and apartments, have fallen 3.76 per cent from last year's peak, according to a PropTrack report.

"House prices in Sydney, Brisbane and Hobart are falling at their fastest pace in more than a decade," the report said.

Another recent report by real estate analyst CoreLogic also found that Brisbane house prices have fallen at the fastest rate in history, but are still 28% higher than at the beginning of the epidemic in 2020.

But during the boom, house prices in Brisbane and regional Queensland soared by 42.1 per cent and 47.1 per cent respectively.

PropTrack analysis shows Sunshine Coast home values fell 4.36 per cent in 12 months, while other major regions posted positive growth over the same period.

But the Sunshine Coast was arguably the hottest property market during the boom, with many super-rich snapping up properties for more than $10 million.

House prices in Cairns increased by 6.11% on the year, although they fell by 0.73% during the quarter.

Townsville's median house value increased by 4.1% year-on-year and 0.1% quarterly, while Gold Coast house prices increased by 1.72% and 0.15% respectively over the same period.

Their analysis shows that nationally, regional dwelling values are doing better than capital cities, falling just 0.3 per cent in January and 0.32 per cent above their peak.

By comparison, the median dwelling value across all capital cities fell by 0.11% in January, leaving it 4.68% below its peak.

PropTrack senior economist and report author Eleanor Creagh said national house prices had fallen for a tenth consecutive month but the worst of the downturn appeared to be over.

She believes that interest rates began to rise in June and July 2022, followed by a rapid decline in house prices, but it has now moderated, and house prices in major capital cities no longer have the same decline as before in recent months.

Australian mortgage holders may face 7.5% interest!

A new analysis shows the typical Australian mortgage holder may soon be paying close to 7.5 per cent interest on their loan repayments.

Financial comparison website Canstar recently warned that the cash rate could be as high as 4.6 per cent based on historical averages, which would mean an extra $1,386 per month in repayments since the Reserve Bank of Australia began raising interest rates in May last year.

Analysis by the website shows that over the past 33 years, the average cash rate has been around 4.6 per cent, a full 1.5 percentage points higher than the current cash rate of 3.1 per cent.

Canstar financial expert Steve Mickenbecker told realestate.com.au that this means the Reserve Bank of Australia still has room to raise interest rates.

"The Reserve Bank continues to remind us that their decisions on the cash rate are based on data. In the fourth quarter of last year, inflation increased by 1.9% and the annual increase was 7.8%. This cannot change the Reserve Bank's current approach," he said. "More rate hikes look inevitable."

He said that while the cash rate now stands at 3.1 per cent after rising at a record pace, it is still well below the historical average of 4.6 per cent. If interest rates do reach this level, the average variable rate for current mortgage holders could be as high as 7.48%, "which would make many mortgage holders nervous."

At a variable rate of 7.48 per cent, repayments on a $500,000 home loan over a 30-year term would jump to about $3,490 per month for a borrower paying principal plus interest.

Regarding historical averages, Canstar's analysis shows that even excluding the record high interest rates in the early 1990s, the adjusted average interest rate is 4.1%, which is still well above current levels.

Currently, two of Australia's largest banks have predicted that the cash rate will rise to 3.85% in May, while Deutsche Bank predicts that the cash rate will reach 4.1% in August, with four interest rate hikes during the period. .

Gold Coast apartment sold off-the-plan for $10.75 million

A yet-to-be-built beachfront apartment on the Gold Coast has sold for a staggering $10.75 million.

An international buyer has splashed out a fortune on a new Gold Coast holiday home in one of the first luxury towers to be built in the heart of Surfers Paradise in 15 years.

It is reported that the property is one of the 37-story, 53-unit property built in partnership between Sydney Sammut Group and Alceon Group.

Construction giant Multiplex is building the project, which is expected to be completed in early 2025.

"Selling so early in the new year is an unusual result," Sammut Group chief executive Allen Sammut said.

The project, designed by PBD Architects, is launching in 2021 with average apartment prices in excess of $6 million.

Buyers include local, interstate and international buyers, with eight apartments currently for sale.

04 Australian property buyers are returning and house prices may start to rise next year

Australian property expert John McGrath says he has "never been more excited" about the future of the housing market as he predicts house prices will start to rise next year after having hit bottom in most markets.

While there is not just one housing market, overall prices appear to be stabilizing around Christmas and we have been pleasantly surprised by the pick-up in buyer activity levels in the market," CEO McGrath said in an interview.

We are seeing an increase in both open houses and auctions.

Auction activity over the past weekend also showed improving market conditions, with 78 per cent of Sydney homes and 68 per cent of Melbourne homes sold at auction, according to preliminary figures from CoreLogic results, which were well above the previous week.

While buyers have "quickly returned to the market" and become more comfortable with the new rate settings, McGrath said seller activity has not increased to the same extent, meaning listings will remain restricted for some time. .

McGrath sold 5569 properties in the six months to December, 29 per cent fewer than the same period last year.

"The number of listings across the industry is down 15-20 per cent and there's not much we can do about it except try to win a bigger market share," Mr McGrath said.

However, it is expected that a year from now the market will be in a different stage of the cycle, with rising house prices and increased transaction activity.