Issue 08 | Thursday 21 April 2022 | Are the changes in the market a good thing?
Hi, it’s Andrew Bell and great to be with you yet again. As you know I don’t highlight properties with each of my newsletters, only when there is something truly very special, and we certainly have one of those here today at 22 Midgera Street, Ashmore.
This home is set on 4,720sqm of manicured resort-style grounds, the home itself is architect designed over 90 squares. You’ll get a good sense of how unique and special this home is, but it’s in such a gorgeous area. It almost looks like a leafy suburb of Melbourne and is quite unique here on the Gold Coast. Many of the features you will be able to see yourself, but some of the harder to see items are the 30,000-litre underground water tank… click here to view the property in detail.
Who knew we were in for such an action packed start to the year. Here on the Gold Coast we experienced an uncharacteristically poor summer of weather with constant strong winds, many days were overcast and there was certainly plenty of rain.
Talking of rain, didn’t the east coast of Australia get battered with two, once in hundred-year flooding events and in some areas, third flooding. Sadly the outbreak of the war in Ukraine that we didn’t think could happen again.
But one thing remains constant and that is that everybody needs shelter and a home, so the real estate market continues to receive a lot of focus both locally and nationally. As I have said for 6 months or more now the real estate market goes in cycles, and it was due for an easing from our most incredible boom that started in the middle of 2020. Unprecedented demand for property resulted in unprecedented shortages of supply, and up went prices. That just couldn’t continue indefinitely and of course, any one of a number of factors was going to start to apply the brakes to the marketplace, and those brakes have been applied now to the market well and truly since February of this year. A number of factors but all really centred around housing affordability with house prices having increased fifty percent over a twenty-month period and with household incomes having just not kept up.
As such the borrowing capacity has hit a wall. Now banks are factoring in interest rate rises and so eligibility to borrow has changed, meaning people cannot borrow as much as they could before. Valuers have now adjusted their valuation process and so valuations are not supporting higher purchase prices, so the brakes have defiantly been applied, and it’s a healthy thing, very healthy. If the market hadn’t had some brakes applied to slow it down then ultimately it would have crashed.
Of course, the media will give this a spin as they always like to dramatise things. They rarely can get the big picture and just report events of today. This slowing of the price growth in the real estate market is healthy protection and much needed. Barring an x-factor event, it will just ensure that we won’t have a property crash as we did like when the Global Financial Crisis hit.
What will be of particular interest will be to see how the brakes that have been applied play out in different markets. We really won’t know until late this year, but I suspect that South East Queensland will again be one of the star performing real estate markets of 2022, not because of continued price growth but because of the least amount of price correction.
But you have to remember, as I have talked about for years now, that real estate is part of an economic cycle. That cycle is worldwide as well as Australia wide, but the amazing thing about real estate is that we all need a home, so there is a never-ending demand. It’s just how large that demand is and in proportion to supply.
It will be good to get rid of the election in the next month, as they are always distracting and disruptive to the economy. At this stage, as I have mentioned previously, no particular significant policies by either party will have any significant effect on the real estate market.
Thanks to all of those who were so supportive of our Business Meets Sports Luncheon to raise money for Surfers Paradise Surf Club. Well over $50,000 worth of new rescue equipment will be on the beach shortly. It was wonderful to see so many of Australia’s top business people sharing their learnings in business and their views of not only the Gold Coast but of Australia moving forward.
I hope you have enjoyed looking at 22 Midgera Street Ashmore for more information or a complete video please feel free to reach out to our marketing agent Jackson Paradise and he will get all the information to you. It truly is a very, very special home.
I will be sure to keep you well informed on the progress of the real estate market, I have been through 7 real estate cycles over 45 plus years and I will continue to share with you all those learnings. Also, feel free to reach out if you have any specific questions you need to be answered by emailing email@example.com.
At a time when we are all so critical about everything and as we continue to enjoy one of the best standards of living in the world, we should remember just how fortunate we are to be living here in Australia. I will be back with you in a fortnight’s time.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group